Economy

Fed’s Kugler Strongly Supports Half-Percentage-Point Rate Cut, Reports Reuters

By Howard Schneider and Ann Saphir

WASHINGTON – Federal Reserve Governor Adriana Kugler expressed strong support on Wednesday for the central bank’s recent decision to reduce interest rates by half a percentage point, emphasizing a renewed focus on the labor market.

"The labor market remains resilient, but the Federal Open Market Committee now needs to balance its focus to continue making progress on disinflation while mitigating unnecessary pain and weakness in the economy," Kugler stated in prepared remarks for a Harvard Kennedy School event. "I strongly supported last week’s decision and, if inflation continues to decrease as I expect, I will advocate for additional cuts."

While Kugler did not provide specifics regarding the pace of future rate cuts, she refrained from indicating whether she would support another half-percentage-point decrease in borrowing costs during the Fed’s upcoming policy meeting on November 6-7, along with the conditions that may influence such a decision.

She anticipates that new inflation data, expected on Friday, will reflect ongoing easing of price pressures, with the headline personal consumption expenditures price index potentially rising by as little as 2.2% year-over-year in August.

The Federal Reserve utilizes the PCE data to guide its 2% inflation target.

Having previously served as chief economist at the U.S. Labor Department, Kugler noted that it is suitable for the Fed to focus on a labor market that, despite showing signs of cooling, remains resilient, indicated by an unemployment rate of 4.2%, which she described as "still quite low by historical standards."

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button

Adblock Detected

Please consider supporting us by disabling your ad blocker