Here is the English translation:
The U.S. Department of Labor reported on Wednesday (5th) that private sector employment increased by 183,000 on a seasonally adjusted basis in January, the largest increase since October last year and exceeding economists' expectations of 148,000.
Subsequently, the U.S. Department of Labor reported yesterday (6th) that the number of initial jobless claims increased by 11,000 to 219,000 in the week ending February 1, higher than the market expectation of 215,000.
These data indicate that the U.S. labor market remains resilient, although the number of initial jobless claims was slightly higher than expected, overall employment growth remains strong.
Fed Official Logan: Interest Rates Near Neutral, Limited Room for Rate Cuts in the Short Term
Against this backdrop, Dallas Federal Reserve Bank President Lorie Logan said at a conference held by the Bank for International Settlements (BIS) in Mexico City yesterday that with strong demand and a robust labor market, the inflation rate is gradually approaching the Fed's target, indicating that the Fed's benchmark policy rate may be close to the neutral level. She emphasized that if this trend continues, there is limited room for further rate cuts in the short term:
"What if inflation is close to 2% over the next few months? While this is good news, in my view, it may not be enough for the FOMC to cut rates quickly."
Logan's remarks suggest that even if inflation continues to cool, since the benchmark rate may be close to the neutral level, there may not be a need for further rate cuts.
However, she also added that if there are signs of deterioration in the job market, the Fed may consider rate cuts.
Overall, she is cautious about cutting rates solely due to improved inflation, and believes that the performance of the job market is also a key indicator to watch. Currently, the U.S. labor market remains robust, with the unemployment rate falling from 4.2% in December to 4.1%.
Logan's Remarks Attract Attention
It is worth noting that Logan's public remarks are closely watched, as she is seen as a potential influential figure in the "post-Powell era".
She has played a key role in stabilizing the market at critical moments. For example, in early 2024, she publicly advocated slowing the pace of balance sheet reduction to avoid a repeat of the 2019 turmoil in the money market, and her suggestion was ultimately adopted by the Federal Reserve, demonstrating the weight of her views in directly influencing policy direction.
Some Federal Reserve observers believe that Logan may succeed New York Fed President and FOMC Vice Chair Williams in 2028, ascending to a core position with a vote in each rate decision. If she is successfully promoted, she is expected to become an important driver of the Federal Reserve's policy making after Powell's term ends in 2026.
Therefore, when Logan stated in her speech that "even if the inflation rate is close to 2%, this may not be enough for the FOMC to cut rates quickly" and emphasized close monitoring of the job market, this is not just a sharing of policy views, but may also become a barometer of the Federal Reserve's future interest rate policy direction.
Tonight, the U.S. Department of Labor will release the employment data for January. Economists expect the pace of employment growth to slow, with an estimated increase of 169,000, lower than the 256,000 in December, but basically in line with the average of the past three months, and the unemployment rate is expected to remain at 4.1%.
