Fed Gov. Adriana Kugler: Job on inflation is not done yet. Policy stance is restrictive

Fed Gov. Adriana Kugler is a speaking at the Brookings institute and says:

  • Pleased with ‘great progress’ on inflation. Optimistic it will continue.
  • Fed’s job on inflation ‘not done yet’.
  • Will remain focused on Fed’s inflation goal until confident inflation is returning durably to 2% target.
  • Risks to our dual mandate ‘roughly balanced’.
  • Our policy stance is restrictive.
  • At some point, cooling inflation and labor markets may make rate cut appropriate.
  • If disinflation progress stalls, may be appropriate to hold policy rate steady for longer.
  • Sees ‘reasons for optimism’ on services inflation, where there has been less progress.
  • Core-services ex-housing ‘still elevated,’ but expect improvement.
  • Continued moderation of wage growth, normalization of price-setting, anchored inflation expectations ‘likely to contribute’ to continued disinflation.
  • Pleased that cooling of labor demand has not led to rise in layoffs.
  • How spending momentum will evolve this year an open question’ affecting disinflationary process.
  • Expects consumer spending to grow more slowly this year. Should help with disinflation.
  • Some measures of financial conditions have eased, but remain relatively tight and are consistent with continued progress on inflation.
  • Paying close attention to upside inflation risks from geopolitics.

In the released comments she does not comment specifically on her expectations for rates going forward..

This article was written by Greg Michalowski at www.forexlive.com. Source