BlockBeats News, May 20th — US Federal Reserve Bank of Philadelphia President Anna Paulson stated that she does not support a rate cut until inflation shows sustained improvement. She emphasized that the current monetary policy should remain restrictive. Speaking at the Atlanta Fed meeting, she noted that the US unemployment rate remains stable, the overall labor market is in balance, and inflation was already high before the Middle East conflict drove up energy prices.

She believes that keeping the interest rate unchanged will help the Fed to assess economic and inflation risks. Paulson stated that a rate cut would only be appropriate if the labor market continues to remain stable and inflation shows sustained improvement. At the same time, she pointed out that if economic growth exceeds potential levels or inflation risks rise, the Fed may also consider further rate hikes.

She also mentioned that the current rise in energy prices is putting pressure on household consumption. Some households have shifted to lower-priced alternatives or rely more on credit cards, but overall consumption is still showing some resilience.

On the market front, as energy shocks and geopolitical uncertainties increase, US bond yields are rising, and the market's expectation of "long-term high-interest rates or even further tightening" is strengthening. Paulson stated that this adjustment in expectations is "healthy."