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Two Fed Officials Signal the Opposition Further Rate Cuts Could Face; January Jobs Report in Focus
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Comments from two Federal Reserve officials on Tuesday underscore that the interest-rate cuts President Trump is betting on—under Fed chair nominee Kevin Warsh's future leadership—may face friction. Dallas Fed President Lorie Logan said she believes the Fed's monetary stance is set well for the risks facing the economy, a sign she might be reluctant to support a return to cutting rates. Logan's caution echoed remarks from Cleveland Fed President Beth Hammack, who said the central bank could err on the side of patience as it assesses the impact of recent rate cuts. The nonfarm payrolls report for January is in focus Wednesday: It is expected to show the U.S. added 55,000 jobs last month—an anemic pace compared to recent years, though a slight pickup from December. Meanwhile, sentiment regarding elevated inflation is resonating across the Pacific; a top official at the Reserve Bank of
Australia said the central bank sees the country’s inflation rate as too high and will take all measures to bring it under control.
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Fed’s Interest-Rate Stance Well-Positioned, Dallas Fed President Says
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Photo: Desiree Rios/Bloomberg News
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Cuts last year reduced the fed-funds rate to a range of 3.5% to 3.75%, a level the Fed reaffirmed at its most recent meeting last month. Speaking at a financial conference in Austin, Texas, on Tuesday, Dallas Fed President Lorie Logan said that setting is about right for an economy facing both persistent inflation and a gradually cooling job market. The Fed’s policy stance is likely near a level where it is neither boosting nor restraining economic activity, Logan said.
“Our policy is well-positioned to respond to risks to either of the FOMC’s dual mandate objectives,” Logan said, referring to the Federal Open Market Committee.
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Fed’s Hammack: Monetary Policy Is in a Good Place to Stay on Hold
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Cleveland Fed President Beth Hammack said she believes monetary policy is in a good place for rates to stay on hold. “Based on my forecast, we could hold for quite some time,” according to a published text of her remarks.
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According to Hammack, the funds rate is now in the vicinity of neutral, meaning it’s not meaningfully restraining the economy. As the Fed balances its dual mandate of maximum employment and price stability, Hammack said recent signs in the labor market point to stabilizing conditions. On the other hand, she notes inflation is still too high.
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Central Banks Around the World
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RBA Will Do Whatever It Takes to Lower Inflation, Deputy Gov Says
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Australia’s inflation rate is too high and the costs of allowing it to remain elevated don’t bear thinking about, RBA’s Deputy Gov. Andrew Hauser said Wednesday.
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Kenya’s Central Bank Cuts Key Lending Rate
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Kenya’s central bank cut its key lending rate as East Africa’s largest economy continues a policy-loosening cycle to boost private-sector lending and economic growth amid receding inflation.
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U.S. Retail Sales Unexpectedly Flat in December
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Economic Growth Forecast Drops After Weak Retail Sales Report
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A widely watched projection from the Federal Reserve Bank of Atlanta got a downgrade Tuesday after a weak government report on retail spending in December.
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Senate Blocks Attempt to Tighten Tax Rules on Big Companies
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The Senate rejected an attempt to overturn Trump administration tax rules that softened a minimum tax on large corporations.
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House Rejects Speaker Johnson’s Effort to Block Tariff Votes
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House lawmakers on Tuesday rejected an attempt by Speaker Mike Johnson (R., La.) to block votes on resolutions disapproving of President Trump’s tariffs—a stinging blow to his leadership that paves the way for lawmakers to potentially rebuke Trump’s signature economic policy.
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8:30 a.m.: U.S. Employment Report
10 a.m.: Online Help Wanted Index
10: 15 a.m.: Federal Reserve Bank of Kansas City President Jeffrey Schmid speaks before the Economic Forum of Albuquerque
10:15 a.m.: Federal Reserve Vice Chair Michelle Bowman speaks at Keefe, Bruyette & Woods Winter Financial Services Conference
4 p.m.: Federal Reserve Bank of Cleveland President Beth Hammack speaks at John Glenn College of Public Affairs event
6 p.m.: U.S. Congressional Budget Office releases 'The Budget and Economic Outlook: 2026 to 2036' report
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8:30 a.m.: Unemployment Insurance Weekly Claims Report - Initial Claims
10 a.m.: Existing Home Sales
10 a.m.: U.S. SEC Chair Paul Atkins testifies to Senate Banking Committee
7 p.m.: Federal Reserve Governor Stephen Miran and FRB Dallas President Lorie Logan speak at Global Perspectives event
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The Trump administration on Tuesday let U.S. companies supply Venezuela with equipment and technology needed to boost the country’s oil production.
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Daily life in Cuba is grinding to a halt under a U.S. campaign to block the island’s oil imports, drawing international criticism that the Trump administration is pushing the island toward a humanitarian crisis with no clear endgame.
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It’s no fun relying on other countries for your energy needs when major powers start using their resources as a bludgeon. Europe is finding that out the hard way, again.
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China’s consumer inflation eased at the start of 2026 after reaching a near three-year high in December, as food prices declined.
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As Bangladesh prepares to vote in the first national elections since that Gen Z revolution, Shipon—who has struggled to find work since finishing graduate school last year—is losing hope that new leaders can solve the problems that are plaguing so many in his generation.
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WSJ Pro Central Banking brings you central banking news, analysis and insights from WSJ’s global team of reporters and editors. This newsletter was compiled by markets reporter Vicky Ge Huang in New York. Send your tips, suggestions and feedback to vicky.huang@wsj.com.
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