Fed officials also stated: The U.S. central bank has not completed its task, and the need to cautiously cut interest rates is justified.
Governor Adriana Kugler and the President of the San Francisco Fed - Mary Daly spoke at the annual conference of the American Economic Association in San Francisco on January 4th.
Two policymakers from the Federal Reserve (Fed) said they feel that the U.S. central bank has not yet completed its task of curbing inflation. But they also do not want to risk harming the labor market.
The remarks of Governor Adriana Kugler and the President of the San Francisco Fed - Mary Daly highlight the task that the central bank faces this year after lowering interest rates by 1 percentage point last year. That is to delicately balance controlling prices and maintaining the labor market.
In December, Fed policymakers signaled that they would slow down interest rate cuts in 2025 to bring inflation down to the Fed's 2% target. This figure was recorded at 2.4% in November.
"We are fully aware that we have not yet achieved that goal; no one is popping champagne to celebrate... And at the same time... we want the unemployment rate to remain at its current level, not to increase rapidly. In November, the unemployment rate was 4.2%", Governor Kugler stated at the annual conference of the American Economic Association in San Francisco.
The President of the San Francisco Fed, who spoke at the same seminar, said: "At this time, I do not want to see the labor market continue to slow down. The market may gradually fluctuate in certain months, but certainly not the labor market continuing to weaken."
Theo Reuters
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