Adriana Kugler, a member of the Board of Directors of the US Federal Reserve, talks about the economy in Washington, DC, USA, on Wednesday, February 7, 2024.
Al Drago | Bloomberg | Getty Images
Inflation could prove to be adhesive, while prices could be picked up again, the Governor of the Federal Reserve Adriana Kugler warned, signaling that the US Central Bank should maintain interest rates during this time.
“I am actually quite worried about some persistence in the inflation we saw,” said CNBC Silvia Amaro during a report of fire at a conference on monetary policy and labor market on Friday.
She pointed to the recent acceleration of inflation expectations, which she said was carefully observing their impact in the way companies set up prices and how workers negotiate wages. That in turn means they could get back to inflation.
Several recent data on data has indicated a consumer concern about increasing prices, with the latest Consumer confidence index From the Conference Committee displaying 12-month inflation expectations in February jumped to 6%, which is 5.2% of the previous month.
“I was one of those who supported strongly any policy that really holds inflation expectations well anchored. And I think it’s critical, and that served us well,” Kugler said.
Looking in advance, Fed’s ball indicated that prices could also rise again.
“I think you know that there is a reason to believe, potentially, there may be price increases and more permanent inflation,” she said, adding that more prices could come from “some policies that may be considered and some already set up.”
Such policies could also affect economic activity, a ball noticed.
“We probably have to consider some of this persistence that I have mentioned, because of different prices categories, because of inflation expectations, and potentially because of some new policies that are ahead of us,” Kugler said.
Touching often by changing development over the decision of the US administration to impose tariffs on the goods imported by key trade partners, including negotiations and potential retaliation, the Fed Bowling Buckle said that there is still “great uncertainty”.
Analysts and economists have widely indicated that they are expecting potential tariffs, and any reciprocal measures random to prices higher for countries on both sides of the measures.
Prepared objections He gave the ball at the conference, also warned of the risks of inflation, also in the prospect of the odds of the interest rate of the Fed.
“Given the recent increase in the expectations of inflation and key categories of inflation that have not shown progress to our goal of 2 percent, it could be appropriate to continue to maintain a policy rate at its current level for some time,” she said at the address.
Fed reduced interest rates three times since September, for a combined full percentage point before keeping it all the time January. The rate of excessive borrowing of the bank is currently in the range between 4.25%-4.5%.
According to Fedwatch tool CME GroupTraders are the last prices in 97% chance that the central bank also leaves unchanged rates when they meet the next later this month. The image seems to become less clear, with about 63% of the likelihood that rates are also held at a Fed meeting, before decreasing in June according to the reduction of the rate.
