The Federal Reserve sends another hawkish signal: officials say rate cuts are not advisable until inflation improves, and even rate hikes cannot be ruled out.

ME News, May 20 (UTC+8), BlockBeats reports that Philadelphia Fed President Anna Paulson stated at the Atlanta Fed conference that she does not support cutting interest rates until inflation shows sustained improvement, and emphasized maintaining the current restrictive monetary policy stance. Paulson noted that the U.S. unemployment rate is stable and the labor market is generally balanced. Inflation was already elevated before the Middle East conflict pushed up energy prices. She believes that keeping rates unchanged helps the Fed assess economic and inflation risks. Paulson said that if the labor market remains stable, rate cuts would only be appropriate if inflation continues to improve. If economic growth exceeds potential or inflation risks increase, the Fed may consider raising rates. She also mentioned that rising energy prices are putting pressure on household consumption, with some households turning to lower-priced alternatives or relying on credit cards, but overall consumption remains resilient. In the market, due to energy shocks and rising geopolitical uncertainty, U.S. Treasury yields have climbed, reinforcing expectations of long-term high interest rates or even further tightening. Paulson described this adjustment in expectations as "healthy." (Source: MLion)
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