According to TechFlow TechFlow, on January 5th, Anna Paulson, President of the Federal Reserve Bank of Philadelphia and a newly elected voting member of the FOMC in 2026, stated that if the economic outlook remains positive, a moderate additional rate cut later in 2026 might be appropriate.
“I expect inflation to moderate, the labor market to stabilize, and economic growth to be around 2% this year,” Paulson said in prepared remarks at the American Economic Association’s annual meeting in Philadelphia last Saturday. “If all of this happens, then some modest further adjustments to the federal funds rate later this year would likely be appropriate.”
The Philadelphia Fed official stated 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.
But she noted that unemployment insurance applications appear to have stabilized. "While the labor market is clearly under pressure, it hasn't collapsed," she said.
