Federal Reserve Board member Ariana Kugler joined other Fed policymakers on Thursday in expressing concerns about rising inflation pressures, despite them remaining relatively modest. She emphasized that these pressures would likely prevent the Fed from adjusting interest rates in the near term.
Key Highlights
Kugler reiterated her support for maintaining the current policy rate, citing the ongoing upside risks to inflation. She pointed out that while inflation expectations have risen, the potential for upcoming policy changes introduces further upside risks.
Recent data suggests that progress toward the Fed’s 2% inflation target may have stalled, with labor market indicators showing moderation but no significant weakening. Kugler also noted that, in light of recent high inflation, consumer expectations could be more sensitive to additional price increases.
However, she found some reassurance in the fact that increases in long-term inflation expectations have remained relatively small.
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