GuShiio.com ① Federal Reserve Governor Kugler said that it may be appropriate to keep interest rates stable for “some time” and pointed out that there are upward risks to inflation;
② Kugler believes that the supply and demand of labor in the United States remain roughly balanced, and the unemployment rate is similar to FOMC members ‘estimates of the long-term unemployment rate.
Cailian News, March 8 (Editor Zhao Hao)Federal Reserve Governor Adriana Kugler said it might be appropriate for the bank to keep interest rates stable for “some time” and pointed to upside risks to inflation.
Kugler wrote in a speech posted on the Federal Reserve’s website on Friday (March 7),”Given the recent rise in inflation expectations and the lack of progress in key inflation categories in achieving our 2% target, it may be appropriate to continue to maintain policy interest rates at current levels for some time.”
Kugler has previously said that the Fed “still has a way to go” to achieve its inflation target and pointed to several indicators of rising inflation expectations. Policymakers at the bank view good inflation expectations as a key factor in keeping prices stable.
Previously, a consumer survey released by the University of Michigan showed that the annual inflation forecast for the next five years was 3.5%, the highest level since April 1995.
It is generally expected that Fed officials will keep borrowing costs unchanged at their mid-March meeting. Kugler and many of her colleagues said they were looking for strong evidence of cooling inflation before cutting rates again.
She pointed out that since the second half of last year, inflation has basically been in a sideways state, and rising inflation in non-market-oriented core services and commodities has put upward pressure on prices.
“This rise is not a welcome trend because in the long term, slowing commodity price gains offset gains in other categories, limiting overall inflation.” Kugler also pointed out that there is “considerable uncertainty” about the inflationary impact of the U.S. government’s new policies.
The tariffs Trump imposes on U.S. trading partners are changing frequently, making it particularly difficult for central bankers to assess how these policies will affect the economy.
When it comes to employment, Kugler believes that the non-farm report released earlier on Friday showed that the labor market remains in good balance. After the quarterly adjustment in the United States in February, the number of non-farm payrolls increased by 151,000, slightly lower than the market expectation of 160,000.
Kugler said unemployment rose slightly to 4.1%, despite a decline in labor force participation, but both remained within near-term ranges.
“Labor supply and demand in the United States remain broadly balanced, and the unemployment rate has been near FOMC members ‘estimates of long-term unemployment, which is consistent with the committee’s largest employment goal.”
