Federal Reserve Board Governor Adriana
Kugler.
Headlines via Reuters:
-
My policy rate expectation is consistent with March FOMC meeting
policymaker projections - If disinflation and
labor market conditions proceed as i am currently expecting, then
some lowering of the policy rate this year would be appropriate - Expect
disinflationary trend to continue - Policy is currently
restrictive, and my baseline expectation is that disinflation will
continue without a broad economic slowdown - Such an outcome is
not assured - Inflation progress
has sometimes been bumpy - Annual core PCE at
2.8% represents ‘considerable progress’ but is still ‘meaningfully
above’ Fed’s 2% target - Data on new tenant
rent agreements suggest that housing inflation broadly will continue
to cool - Continued
disinflation will indeed require further progress in housing and
non-housing services - Labor market has
moved into better balance - Suspect strong
population growth ‘helps resolve the puzzle’ of labor market growth
and strong consumption even as inflation eases - Important that wage
growth be consistent with 2% inflation over time; US is moving back
toward that kind of wage growth - Anchored inflation
expectations are evident in consumer and business surveys - Expect consumption
growth to slow some this year - Consumer spending
was soft in January and February, suggesting we are on track for
lower consumption growth in q1 vs second half of 2023 - Expect GDP growth
this year to be solid but slower than 2023 pace of 3.1% - My baseline
expectation is that further disinflation can be accomplished without
a significant rise in unemployment - Appears supply
networks are adapting to port of Baltimore disruption
Bolding above is mine. ‘Meaningfully above’ doesn’t sound to me like we get a rate cut in two months. But, I’ve been like a broken record on this (kids, ask an oldie what being a broken record means).
This article was written by Eamonn Sheridan at www.forexlive.com. Source