Anna Paulson, the newly appointed voting member of the Federal Reserve and President of the Philadelphia Fed in 2026, stated that if the economic outlook remains positive, a moderate additional rate cut later in 2026 may be appropriate. I expect inflation to ease, the labor market to stabilize, and economic growth this year to be around 2%. If all of this happens, then some moderate further adjustment to the federal funds rate later this year is likely to be appropriate.

Anna Paulson also mentioned that risks in the labor market remain high, with the slowdown in labor demand outpacing the supply contraction caused by the Trump administration's immigration crackdown. Although the labor market is clearly under pressure, it has not collapsed.