In her first official appearance as president of the Federal Reserve Bank of Philadelphia, Anna Paulson predicted that the US central bank would continue to cut interest rates in the coming period in order to support the labor market, which has begun to show noticeable signs of slowing down.
In her speech to the National Association for Business Economics, Paulson explained that monetary policy should move towards a more neutral stance to balance the risks between achieving price stability and maintaining high employment rates , noting that the impact of tariffs on inflation would be temporary and less severe than previously estimated .
Paulson said the recent quarter-point interest rate cut was a sensible step to protect the labor market from a slowdown, stressing that continuing this approach is the most likely course of action given the increasing global economic uncertainty .
This statement comes at a time when policymakers within the Federal Reserve have differing views on the future path of interest rates, with some seeing the need for monetary easing to counter the risks of a slowdown, and others fearing that new US tariffs will fuel inflationary pressures.
Paulson predicted that 2026 would see moderate economic growth with a gradual decline in the inflation rate, stressing that current policy is sufficient to maintain a strong labor market and price stability in the medium term.
Paulson’s statements came to support investors’ expectations in global markets of an increased pace of monetary easing , which was immediately reflected in the decline of US bond yields and the rise in gold prices , while the dollar showed slight fluctuation against the basket of major currencies as more economic indicators were awaited.
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