Federal Reserve's Bowman: Progress on inflation seems to have stalled, making it hard to believe that interest rates are restrictive
Federal Reserve Governor Bowman stated that progress on inflation seems to have stalled, making it difficult to consider current interest rates as restrictive. He emphasized that inflation is the primary task of monetary policy, and a rapid rate cut could reignite inflation. Despite the strong U.S. economy, with the labor market nearing full employment and the unemployment rate remaining at historically low levels, the risk of inflation exceeding the 2% target remains prominent
Federal Reserve Governor Bowman: When the FOMC decides on monetary policy, inflation is the top priority. If interest rate cuts happen too quickly, it may reignite inflation. The degree to which inflation exceeds the Federal Reserve's 2% target remains concerning. The upward risks of inflation are still prominent. Progress on inflation seems to have stalled. There is a tendency to cut rates cautiously and gradually. It is hard to believe that the current (policy) interest rates are restrictive. The U.S. economy is strong, and the job market is close to full employment. The unemployment rate remains at historically low levels. The unemployment rate is expected to rise in 2024, reflecting a slowdown in hiring.
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