The "hawkish dove" Milan of the Federal Reserve raised its expectations for year-end interest rates but still believes that there needs to be a rate cut this year.

Against the background of sustained inflation data falling below expectations, the Federal Reserve's internal divisions on the interest rate path have further emerged. "Hawkish dove" Federal Reserve Board member Milan has stated that he has raised his year-end interest rate level forecast, but still believes that it is necessary to implement rate cuts this year. Milan, speaking at an event in New York, pointed out that due to recent poor inflation data, he has raised his policy rate year-end forecast by 50 basis points. "This is not because of oil prices or the Iran conflict, but based on the latest inflation data we have received," he said, adding that the adjusted interest rate path is closer to a "neutral level". However, Milan still holds a relatively accommodative view on the current monetary policy stance. He voted against the 25 basis point rate cut in the March 18 rate decision, instead advocating for a rate cut. In this meeting, Federal Reserve officials unanimously acknowledged that uncertainty arising from the situation in the Middle East is increasing, while emphasizing the need to see further declines in inflation before resuming rate cuts. Despite raising expectations for the final interest rate, Milan still believes that a cumulative rate cut of about 1 percentage point this year is appropriate to return the rate to a "neutral range" that neither stimulates nor restrains the economy. "I do not believe that the current economy needs to accelerate growth by 'stepping on the gas' through monetary policy, but we should also not continue to hinder the economy," he said. "The current policy rate still slightly tight, have a certain inhibitory effect on the economy." Analysts point out that Milan's statements reflect that the balance within the Federal Reserve between "inflation stickiness" and "economic slowdown" is still ongoing. Some officials are cautious about rate cuts, but the weakening job market and slowing economic momentum still provide room for a policy shift this year.