Federal Reserve Board Governor Adriana Kugler commented late Thursday that US inflation still has “some way to go” to reach the central bank‘s 2% target, and the path to achieving that goal remains uncertain and challenging.
In her remarks, Kugler highlighted that while downside risks to employment have lessened, upside risks to inflation persist. She noted the uncertainty surrounding the potential effects of new economic policies, particularly tariffs, which could affect inflation dynamics, though the exact impact remains unclear.
Key Quotes:
“The downward risks to employment have diminished, but upside risks to inflation remain.”
“The potential net effect of new economic policies remains highly uncertain.”
“We will continue to closely assess incoming data and evolving economic conditions.”
“We have to wait to assess the effects of tariffs on inflation.”
Kugler emphasized that the Fed would remain vigilant, closely monitoring the evolving landscape of economic policies, including the unknown effects of tariffs introduced by the Trump administration, which could lead to price pressures, although the extent remains uncertain.
Market Reaction: The US Dollar Index (DXY) traded 0.02% lower, holding steady at 106.33 at the time of writing.
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