The "cautious cut" camp of the Federal Reserve gains another member, as Powell emphasizes that a "soft landing" is still under control.

In an interview with the media on Friday, Tom Barkin, a voting member of the Federal Open Market Committee (FOMC) and President of the Richmond Federal Reserve, stated that although the unemployment rate and inflation have both deviated somewhat from the Federal Reserve's monetary policy targets, he believes that the risks of further deterioration in both are limited. This highlights his view that the "accelerated rate cuts" advocated by some dovish monetary policy makers are not urgent, choosing to take a neutral stance between the dovish stance and the hawkish stance of FOMC voting members who advocate for "cautious rate cuts". "We are very focused on trying to land this plane smoothly and achieve a balance between inflation and unemployment, which is what we are focusing on in the United States economy's 'soft landing'. The soft landing remains within sight," Barkin stated in an interview on Friday. "Both are moving in the wrong direction - but on the other hand, the downside risks are very limited, and we only need to adjust our position as we learn more." Federal Reserve officials voted last week to cut the benchmark interest rate by 25 basis points to address growing concerns in the market about the slowdown in the US non-farm labor market. Prior to this, they had maintained rates unchanged until 2025 to assess the inflation risks posed by President Donald Trump's tariff policies. Following the announcement of the Federal Reserve's economic projections after last week's monetary policy decision, as well as subsequent public comments, it was revealed that there is significant disagreement among FOMC monetary policy decision makers: some are hoping to continue cutting rates at the upcoming meetings to guard against employment risks, while others are still more concerned about the potential for inflation. Barkin, who does not have voting rights in the Federal Open Market Committee's rate-setting, noted that with the implementation of tariff policies and strong consumer spending still ongoing, uncertainty that had previously clouded the economic outlook earlier this year has gradually dissipated from US companies. Austan Goolsbee, Chair of the Chicago Federal Reserve, who has historically leaned towards a dovish monetary policy stance, stated on Tuesday that given inflation is still above the Federal Reserve's target and showing an upward trajectory, the Federal Reserve should maintain a cautious stance on further rate cuts rather than an aggressive path. Nearly simultaneously, Federal Reserve Governor Michelle Bowman stated that given the rapid weakening of the US non-farm labor market, there is a risk that FOMC decision makers may fall behind economic conditions and need to take action to lower rates decisively. Their recent remarks, along with the dot plot released last week, convey similar messages - highlighting significant differences within the Federal Reserve regarding the outlook for rates. The Federal Reserve cut rates for the first time in nine months, with the size and timing of the cut meeting market expectations. The most watched dot plot from the FOMC indicates median rate forecasts suggest the Federal Reserve will cut rates three times this year, one more time than in the previous dot plot, with another cut expected next year. However, the specific forecast data in the dot plot suggests that there may be greater divergence in future Federal Reserve rate decisions: of the 19 Federal Reserve officials, 7 expect no further rate cuts this year, with 2 supporting only one more cut. In other words, if it were not for the low expectations of the new Federal Reserve Governor appointed by Trump pulling down the average, the fact that the median rate in the dot plot suggests another cut or two by the end of the year is evenly matched. Additionally, most Federal Reserve officials believe that given the current outlook for a robust (albeit slightly slower) US economic activity, there is no need for further substantial rate cuts next year.