The Federal Reserve’s progress in reining in runaway prices without sending the U.S. economy into a tailspin is currently “almost as good as it gets,” Fed Gov. Christopher Waller said Tuesday.
That progress clears the way for the bank to lower interest rates this year, although Waller said he isn’t 100% sure that the decline in inflation will last.
In remarks delivered at The Brookings Institution on Tuesday morning, Waller said he believes monetary policy is currently set properly at a restrictive level that should continue to put downward pressure on demand, allowing central bank officials to achieve their 2% inflation target.
As long as inflation doesn’t rebound or fail to drop, he believes policymakers will be able to lower the target range for the federal funds rate this year.
In December, the Fed’s summary of officials’ economic projections showed that the median call among policymakers was for three cuts of 0.25 percentage point in 2024.
Investors have anticipated that the first cut could come as soon as March, but Waller didn’t provide any clarity about the timing. (Barrons 01/16/24) Waller Confirms Rate Cuts Ahead. The Timing Is Foggy. (msn.com)
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