Chicago Federal Reserve President: The U.S. economy may have never deviated from the "golden path," and interest rates can continue to be lowered if inflation does not rise

According to the Zhitong Finance APP, Charles Evans, the president of the Federal Reserve Bank of Chicago, stated on Monday at a public event in Milwaukee that if recent tariff increases do not lead to significant inflationary pressure, the Federal Reserve may consider restarting the interest rate cut process, although he did not specify when such action might be taken.

Evans pointed out, "Surprisingly, we have seen stable inflation data for three consecutive months so far, with no significant increases." He emphasized that if the impact of tariffs remains mild, "then in my view, we have never deviated from what I call the 'golden path,' which is the healthy trajectory of the U.S. economy prior to the imposition of tariffs."

He further stated, "If the dust has settled, then we should continue to advance the previous monetary policy path." This statement suggests that if inflation remains controlled in the future, the Federal Reserve may resume the interest rate cut cycle that was previously halted.

At last week's policy meeting, the Federal Reserve decided to keep interest rates unchanged for the fourth consecutive time, continuing to observe President Trump's policies, particularly the impact of tariffs on consumer prices and the overall economy. Over the weekend, the U.S. launched airstrikes on Iranian nuclear facilities, raising further concerns in the market about the global economic outlook.

Evans also mentioned that certain industries are currently "sharing" the costs of tariffs, meaning that costs may be partially absorbed among suppliers, manufacturers, and consumers, rather than being fully passed on to the end market.

He stated, "We are currently trying to determine whether this is the full extent of the impact, or whether future inflation data will show new reactions." This indicates that the Federal Reserve remains highly cautious regarding its monetary policy.

After last week's interest rate decision, there are still differences within the Federal Reserve regarding the future policy direction. The dot plot shows that 10 officials expect at least two 25 basis point rate cuts by 2025, while another 7 officials believe that rates should remain unchanged before the end of the year.

Subsequently, several officials expressed differing views on the timing of interest rate cuts. Governor Christopher Waller, nominated by Trump, and Vice Chair Lael Brainard both indicated that if inflation remains mild, they might support starting rate cuts in July. Meanwhile, San Francisco Fed President Mary Daly believes that autumn is more likely to be the appropriate time