Inflation Eases, Fed Ready for More Cuts
San Francisco Federal Reserve President Mary Daly said on Friday that recent inflation has been lower than feared. She said this gives the central bank room to adjust policy without being overly aggressive.
Daly added that the labor market is starting to weaken, and this could be concerning if not managed with a proper risk management approach. This means the Fed needs to be careful not to trigger new problems with its policy easing, but also to ensure it doesn't respond too late to the economic downturn.
She believes monetary policy remains somewhat tight, even though the Fed cut interest rates in September. In other words, the current policy is still suppressing economic activity and needs to be evaluated as the data evolves.
As part of risk management, Daly said the Fed is projecting further cuts. Going forward, decisions will depend heavily on inflation and labor data, with the goal of sustainably lowering inflation while maintaining a healthy labor market. (asd)
Source: Newsmaker.id
