Is the Federal Reserve signaling a rate cut? The current interest rate remains tight, and there may be room for adjustment in the second half of the year.

【BlockBeats】The latest policy moves by the Federal Reserve are worth paying attention to. Recently, Philadelphia Fed President Patrick Harker stated that if inflation continues to cool down, the Fed indeed has room to further cut interest rates, but he also clearly pointed out that any new rate cut measures will not be rushed.

There are several key pieces of information to understand here. The current Fed target range of 3.5% to 3.75%, according to Harker, remains in a “slightly tight” state. This indicates that the existing interest rate level is sufficient to combat inflationary pressures, and also means that if inflation truly eases, there will be justification for a rate cut.

In his latest speech, Harker mentioned: “If inflationary pressures gradually subside and the economy remains on expected track, it may be reasonable to make moderate adjustments to the federal funds rate in the second half of this year.” His tone is cautious; he did not promise immediate action but emphasized the need for continued observation.

The performance of the labor market gives him some dilemma. He stated that current employment data are “mixed”—the job market is obviously under pressure but not to the point of collapse. This means that before considering further policy adjustments, he needs to see more evidence, especially clear signals on how the economy will develop in the coming months.

For the market, this speech both hints at the possibility of rate cuts and conveys a cautious attitude. In the short term, the Fed is unlikely to act hastily. But if data continues to improve, policy space in the second half of the year could open up. This will have a substantial impact on capital allocation and market expectations.