Fed's Paulson signals another rate cut could take a while

Core Viewpoint - The Federal Reserve Bank of Philadelphia President Anna Paulson indicated that further rate cuts by the central bank may be delayed as officials assess the economy's performance following last year's easing measures [1][2]. Economic Outlook - Paulson forecasts inflation to moderate, the labor market to stabilize, and growth to be around 2% for the year [2]. - She expressed cautious optimism regarding inflation, suggesting a potential end-of-year inflation rate close to 2% as tariff-related price adjustments conclude [5]. Interest Rate Policy - The current funds rate is viewed as somewhat restrictive, still working to alleviate inflation pressures [3]. - The Federal Open Market Committee (FOMC) reduced the interest rate target by 0.75 percentage points last year, now set between 3.5% and 3.75% [3][4]. Labor Market Insights - The labor market is showing signs of deceleration but is not breaking, with both supply and demand factors contributing to the hiring situation [6]. - Close attention is warranted on the hiring front as the year progresses [6].