ME News Report, April 18 (UTC+8), Federal Reserve Board Member Waller stated that due to the energy shock triggered by the Iran conflict, he remains cautious about whether a rate cut is needed in the short term and warned that the conflict could have a sustained impact on inflation. Waller outlined two main scenarios in his speech. In the first scenario, if the Strait of Hormuz reopens and trade flows return to normal, officials will be able to ignore the surge in energy prices and shift their focus later this year to a weakening labor market. He said, "If this occurs, I see a prospect where inflation continues to fall toward the 2% target, which makes me cautious about current rate cuts and more inclined to support the labor market through rate cuts later this year when the outlook is more stable." However, he warned that oil prices and the overall market are underestimating the risk of a prolonged conflict. "In terms of inflation, the risk is that the longer the conflict persists and energy prices stay high, the greater the likelihood that these elevated prices will permeate other prices, as businesses will incorporate high energy costs into their pricing." He stated that if this happens against a backdrop of a weak labor market, it will limit policy response space. In such a scenario, he will weigh the risks of higher inflation against a weaker labor market, "If the inflation risk exceeds the labor market risk, it may mean maintaining the policy rate within the current target range." (Source: Jintou)

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OrigamiMountainsAndRivers

· 12h ago

It feels like this year's interest rate cut window is narrowing.

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LonelyStoneUnderTheAurora

· 13h ago

The 2% inflation target is probably going to be delayed again.

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GateUser-6fd3205e

· 14h ago

Energy security is more fundamental than monetary policy.

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tvl_down_bad

· 14h ago

The expectation of interest rate cuts has cooled again, and the market needs to reprice.

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FudAlsoNeedsAnImage

· 14h ago

No luck in the short term, wait until the end of the year to see the trend.

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GateUser-517aed04

· 14h ago

This statement presents both extreme scenarios.

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RugcheckRoommate

· 14h ago

If the labor market can't hold up, how will the Fed choose?

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SlothSignal

· 14h ago

Be careful now when betting on interest rate cuts.

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MildlyRugged

· 14h ago

The trader is going to adjust the model parameters again tonight.

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AutumnTranquility

· 14h ago

If conflicts escalate, high interest rates may last longer

View OriginalReply0

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Federal Reserve Board member Waller is cautious about rate cuts, warning of long-term conflict risks

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