After the improvement in the employment figures in the US and the disappointment of the ISM services PMI for December, several officials of the Federal Reserve (Fed) spoke about the economic situation in the country and the next measures of the central bank.
Notable among them are Atlanta Fed President Raphael Bostic, outgoing Chicago Fed President Charles Evans, Kansas City Fed President Esther George, and Federal Reserve Bank of Richmond President , Thomas Barkin.
First, the Wall Street Journal (WSJ) quoted Charles EvansChicago Fed President, saying: “Economic data may support a 25 basis point interest rate hike at the next Fed meeting“.
“The Fed is in a good spot having dipped to a 50 basis point rise in December“added Evans according to WSJ reported Reuters.
The story also mentioned the president of the Chicago Fed saying: “If they drop it back down to 25 basis points, that buys a little more time. -since they continue to increase the funds rate to the same point that I expected- to let the data evolve“.
It was followed by additional comments from the Atlanta Fed president, Raphael Bostic, who mentioned that Christmas shopping numbers could influence the rate decision, “if consumers are more or less resilient.” Earlier, on Friday, the head of monetary policy had raised the possibility of a slowdown in the US economy.
Additionally, Kansas City Fed President Esther George, pointed out that the longer inflation stays high, the greater the chances that it will become embedded and costlier to fight it. The head of economic policy also stated that renewed inflationary pressures from energy and crop prices are a “very real risk”. “How much further policy tightening will be necessary is a ‘bottom line’ of the deliberations,” according to the Fed’s George.
Richmond Fed President Thomas Barkinpraised the inflation reports for the past two months as “a step in the right direction“, but marked the fears for the highest average figures. “The studies foresee between 6 and 12 months before the setbacks in demand calm the inflation rateBarkin added.
The head of monetary policy also stated that a more gradual path for interest rates should limit the damage to the economywhile adding: “(It) makes sense to target rates more deliberately in the context of policy lags.”
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.
