There are disagreements among regional Federal Reserve presidents on the policy path, with two officials believing that it is still possible for interest rates to be cut in December.

Local officials of the Federal Reserve voiced their opinions intensively on Monday. Mary Daly, President of the San Francisco Fed, expressed her support for the 25 basis point interest rate cut implemented by the Federal Reserve last week. She believes that it is appropriate to slightly lower the policy rate further in the current situation where inflation is still above the 2% target but the labor market is cooling down. She pointed out that inflation in the US is currently around 3%, still above the target but has significantly dropped; although the labor market has slowed down, it is not "on the brink of a cliff." Regarding the next interest rate meeting on December 9-10, she emphasized that she will "maintain an open mind" and will evaluate before the meeting whether the accumulated 50 basis points interest rate cuts this year have provided enough protection for the job market, or whether further easing is still needed. She also mentioned that despite the government shutdown causing a lack of official economic data, the Federal Reserve can still rely on various surveys and data from business communications to formulate policies, "we are not flying blind." In contrast, Charles Evans, President of the Chicago Fed, sent a more hawkish signal. He stated that he has not yet decided whether to support the rate cut in December and that his threshold for a rate cut is "higher than in the previous two meetings." Evans said that inflation has been above the target for four and a half years and the trend is still not ideal, which makes him cautious about continuing to relax policies. He acknowledged that the labor market has cooled down, but still believes that most indicators show stable labor demand. He specifically warned that in the background of a government shutdown, incomplete data, and unclear inflation trends, prematurely cutting rates may make a "policy mistake of preempting" and emphasized that "interest rates should decline with inflation, not ahead of it." Another official, Federal Reserve Board Governor Lael Brainard, has a more dovish attitude. She stated that the December meeting is still a "possible rate cut meeting" and pointed out that the current risks of inflation and employment are "increasing in both directions." In her view, if rates remain too high, the labor market may deteriorate sharply; if rates are cut excessively, it may unsettle inflation expectations. She explained that the reason she supported the 25 basis point rate cut last week was because the policy still has a "modest tightening effect," and currently "employment risks outweigh inflation risks." She also acknowledged the challenges posed by data gaps but emphasized that the Federal Reserve still has a wealth of private data and survey information to support policy research. It is worth noting that Brainard is currently in the midst of a political and legal controversy. She was previously accused by the Trump administration of providing false information in a mortgage application, and Trump even announced his intention to dismiss her, but the decision is currently being blocked by the courts, and the case is expected to be submitted to the Supreme Court for review in January. Brainard was appointed by Biden and her term lasts until 2038, she is still participating in monetary policy voting. The market currently estimates the probability of a rate cut in December to be around 50%, but with incomplete economic data, unclear inflation trends, and differing speeds of the labor market cooling down, the policy outlook has become more uncertain.