Feds Collins: Inflation will come down even with a healthy labor market,but will take time

Feds Collins on Bloomberg TV says:

  • Inflation will continue to come down with a healthy labor market, but it will take some time
  • Fed policy not on preset path
  • Fed must be patient but it might take more time on inflation
  • Very optimistic that inflation will come down
  • Risks are two-sided on policy
  • Wage growth has been faster than pre-pandemic levels
  • Wage growth is still consistent with inflation falling back down toward 2%
  • Must be cautious against moving too quickly
  • Monetary policy is modestly restrictive
  • At some point it would be appropriate to ease, but we are not at that point yet
  • Baseline is to cut rates later this year
  • Timing of presidential election does not hinder Fed policy
  • Consumption and demand has remained relatively strong.
  • Fed policy will be data dependent.
  • What greater confidence on Powell before they change policy stance
  • No urgency on rate cuts. See lots of reasons for patients
  • Over time Fed will cut rates, but cannot say that what specific levels.

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