TechFlow news, on January 5th, according to Jinshi Data, Anna Paulson, President of the Federal Reserve Bank of Philadelphia and a newly appointed voting member of the FOMC in 2026, stated that if the economic outlook remains benign, some modest additional interest rate cuts later in 2026 may be appropriate.
"I expect inflation to moderate, the labor market to stabilize, and economic growth this year to be around 2%," Paulson said in prepared remarks delivered at the annual meeting of the American Economic Association held in Philadelphia last Saturday. "If all of that happens, then some modest further adjustments to the federal funds rate later this year are likely appropriate."
The head of the Philadelphia Fed noted that risks in the labor market remain elevated, with the slowdown in labor demand outpacing the contraction in supply caused by the Trump administration's crackdown on immigration policies.
But she pointed out that unemployment insurance claims appear to have stabilized. "While the labor market is clearly under pressure, it is not collapsing," she said.
