The Federal Reserve’s vice chair has indicated that a cautious, incremental approach to lowering interest rates is warranted due to complex economic trade-offs. With inflation still above target and labor markets showing resilience, policymakers are balancing the risks of moving too quickly against the potential drag on growth from maintaining restrictive monetary policy.\n\nThe official emphasized that while recent data suggests some cooling in price pressures, the central bank must remain vigilant to ensure inflation sustains a downward trend toward its 2% objective. A premature easing could reignite inflationary pressures, whereas waiting too long might unnecessarily slow economic activity.\n\nThis stance reflects a broader strategy of data dependence, where future decisions will be guided by incoming economic indicators rather than a preset timetable. The Fed has maintained its benchmark rate at a 23-year high for several consecutive meetings, underscoring its commitment to restoring price stability without triggering a downturn.\n\nFinancial markets have responded with cautious optimism, anticipating that rate reductions will begin in the coming quarters but unfold at a measured pace. Analysts interpret the vice chair’s comments as a signal that any adjustments will be carefully calibrated to preserve both economic stability and employment levels.\n\nThe central bank continues to monitor key metrics including consumer spending, wage growth, and housing market dynamics as it navigates the path toward a balanced policy stance.\n— news from The Wall Street Journal\n\n— News Original —\nwsj.com\nFed Vice Chair Says Economic Trade-Offs Justify Lowering Rates Slowly The Wall Street Journal