Fed May Lower Interest Rate Once This Year, Says Harvard Economist

According to Odaily, Jason Furman, a former senior economist in the Obama administration and current Harvard University professor, suggests that the Federal Reserve might only reduce the benchmark interest rate once this year if the labor market remains robust. Furman notes that the Fed has entered a phase where a rate cut requires justification. Last year, the Fed's stance was more relaxed, considering rate cuts as a precautionary measure. However, with ongoing concerns about inflation and uncertainty regarding the optimal rate to curb demand, a 25 basis point cut seems the most likely scenario if the labor market stays healthy. Furman also mentioned that if circumstances change and unemployment begins to rise, the Fed would intervene and ease policies.