Minneapolis Federal Reserve Bank President Neel Kashkari said Tuesday that while the Fed has every reason to feel confident in its long-running battle against temporary inflation, it may still be too early to declare complete victory. . Key US Consumer Price Index (CPI) figures due mid-week are expected to show a slight increase in annualized inflation figures.
Highlights
I continue to be surprised by the resilience of the American economy.
It looks like the strong job market and strong economy will continue.
The Fed won’t model the effect of Trump’s policies on the economy until they become clearer.
The tariff is a one-time increase in prices, that is not inflationary in itself.
I don’t want to declare victory over inflation, but there are good reasons to be confident.
It may take a year or two to reach 2% inflation given the dynamics in housing.
The robust labor market is encouraging and the economy appears to be in a strong position.
If inflation surprises higher before December, that could give us pause.
In a higher productivity environment, the neutral rate is higher, meaning the Fed has less room to cut.
We are modestly restrictive.
The threshold to stop the reduction of the Fed’s balance sheet is quite high.
The Fed has a long way to go before stopping the reduction of its balance sheet.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
