Kugler, Daly say mission not done on inflation By Reuters

Written by Anne Saphir

(Reuters) – Two Federal Reserve policymakers said on Saturday that they felt that the US central bank’s mission to tame inflation was not over yet, but they also indicated that they did not want to risk harm to the labor market while trying to end this problem. Mission.

These statements from Governor Adriana Kugler and San Francisco Fed President Mary Daly highlight the delicate balancing act facing U.S. central bankers this year as they look to slow the pace of interest rate cuts. The Fed cut short-term interest rates by a full percentage point last year, to the current range of 4.25% to 4.50%.

Inflation according to the Fed’s preferred measure has fallen significantly from its mid-2022 peak of around 7%, hitting 2.4% in November. That’s still above the Fed’s 2% target, and in December policymakers expected slower progress toward that goal than they had previously expected.

“We are fully aware that we are not there yet,” Kugler said at the annual conference of the American Economic Association in San Francisco. “No one is drinking champagne anywhere.” “At the same time…we want the unemployment rate to stay the same” and not rise quickly.

In November, the unemployment rate was 4.2%, which is consistent with her and her colleague Daly’s view of maximum employment, the Fed’s second goal alongside that of price stability.

“At this point, I don’t want to see a further slowdown in the labor market — maybe it moves gradually in bumps and bits in a given month, but certainly not a further slowdown in the labor market,” said Daly, who was speaking. The same painting.

Policymakers were not asked, nor did they volunteer their opinions, about the potential impact of incoming President Donald Trump’s economic policies, including tariffs and tax cuts, which some have speculated could fuel growth and reignite inflation.

Two Federal Reserve policymakers said Saturday they feel the U.S. central bank’s job of taming inflation is far from over, but they also signaled they don’t want to risk hurting the labor market as they try to finish that job.

These statements from Governor Adriana Kugler and San Francisco Fed President Mary Daly highlight the delicate balancing act facing U.S. central bankers this year as they look to slow the pace of interest rate cuts. The Fed cut short-term interest rates by a full percentage point last year, to the current range of 4.25% to 4.50%.

Inflation by the Fed’s preferred measure is well below its mid-2022 peak of around 7%, hitting 2.4% in November. That’s still above the Fed’s 2% target, and in December policymakers expected slower progress toward that goal than they had previously expected.

“We are fully aware that we are not there yet,” Kugler said at the annual conference of the American Economic Association in San Francisco. “No one is drinking champagne anywhere.” “At the same time…we want the unemployment rate to stay the same” and not rise quickly.

In November, the unemployment rate was 4.2%, which is consistent with her and her colleague Daly’s view of maximum employment, the Fed’s second goal alongside that of price stability.

“At this point, I don’t want to see a further slowdown in the labor market — maybe it moves gradually in bumps and bits in a given month, but certainly not a further slowdown in the labor market,” said Daly, who was speaking. The same painting.

Policymakers were not asked, nor did they volunteer their opinions, about the potential impact of incoming President Donald Trump’s economic policies, including tariffs and tax cuts, which some have speculated could fuel growth and reignite inflation.

Two Federal Reserve policymakers said Saturday they feel the U.S. central bank’s job of taming inflation is far from over, but they also signaled they don’t want to risk hurting the labor market as they try to finish that job.

These statements from Governor Adriana Kugler and San Francisco Fed President Mary Daly highlight the delicate balancing act facing U.S. central bankers this year as they look to slow the pace of interest rate cuts. The Fed cut short-term interest rates by a full percentage point last year, to the current range of 4.25% to 4.50%.

Inflation according to the Fed’s preferred measure has fallen significantly from its mid-2022 peak of around 7%, hitting 2.4% in November. That’s still above the Fed’s 2% target, and in December policymakers expected slower progress toward that goal than they had previously expected.

“We are fully aware that we are not there yet,” Kugler said at the annual conference of the American Economic Association in San Francisco. “No one is drinking champagne anywhere.” “At the same time…we want the unemployment rate to stay the same” and not rise quickly.

In November, the unemployment rate was 4.2%, which is consistent with her and her colleague Daly’s view of maximum employment, the Fed’s second goal alongside that of price stability.

“At this point, I don’t want to see a further slowdown in the labor market — maybe it moves gradually in bumps and bits in a given month, but certainly not a further slowdown in the labor market,” said Daly, who was speaking. The same painting.

Policymakers were not asked, nor did they volunteer their opinions, about the potential impact of incoming President Donald Trump’s economic policies, including tariffs and tax cuts, which some have speculated could fuel growth and reignite inflation.