Over the past year, the Federal Reserve has aggressively raised interest rates to reduce inflation from 40-year highs.
he data from recent months are overwhelmingly positive for the FOMC’s two objectives: maximum employment and price stability
Argentine News
In a clear sign that the Federal Reserve might not upload interest rates at its next meeting, but could do so later, the governor of the central bank, Christopher Waller He said he wants to “wait, watch and see.” if the US economy continues its streak of strength or weakens due to the increases in the cost of credit to date.
“If the real economy weakens, we have more room to wait for further rate hikes and let the recent rise in long-term rates do some of our work.“said Waller, one of the Fed’s most hawkish monetary policymakers, in remarks prepared for the European Economics & Financial Center seminar in London.
Interest rates: the Fed’s decision
“But if the real economy continues to show underlying strength and inflation appears to stabilize or reacceleratefurther tightening of monetary policy is likely to be needed despite the recent rise in longer-term rates,” he adds.
During the last year, lThe Federal Reserve has aggressively raised interest rates to reduce inflation from 40-year highsand this year there has been clear progress in reducing price pressures, even though the labor market has remained strong, Waller says in his comments.
“Data from the last few months is overwhelmingly positive for the FOMC’s two objectives: maximum employment and price stability“, he stated. But that cannot continue, he added.
If the economy slows down, “we can maintain the official interest rate and let the economy evolve in the desired way“, he assures. But if demand and economic activity continue at their recent pace, that could put upward pressure on inflation, and “further action on the official interest rate would be necessary to ensure that inflation returns to target and expectations remain anchored“.
Source: Ambito
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