FED

Given robust economic expansion, a stable labor market, and inflation persisting above the target, St. Louis Fed President Musalem supports maintaining the federal funds rate target range at 4.25%-4.50%. He indicated that the FOMC may face conflicting dual mandate objectives.

Chicago Federal Reserve President Austan Goolsbee on Thursday said he does not expect the inflation reading the U.S. central bank uses to set its inflation target to be as “sobering” as the previously reported Consumer Price Index figures.

Federal Reserve Governor Adriana Kugler indicated that upside risks to inflation persist, and the Federal Reserve should maintain the federal funds rate target range at the current level of 4.25% to 4.50%. The Fed is currently exerting moderate restraint on the economy and persistently elevated inflation.

Federal Reserve Vice Chairman Jefferson indicated that the current U.S. inflation rate remains somewhat elevated. Progress toward the Fed's 2% target has been slow over the past year, and the path of inflation is expected to remain uneven. The Fed may consider pausing adjustments to the policy interest rate.

Atlanta Federal Reserve President Raphael Bostic indicated that U.S. inflation is projected to return to the target level by early 2026, with the neutral interest rate likely to be between 3% and 3.5%, approaching this range by early next year.

The Federal Reserve decided to hold the federal funds rate steady at its January monetary policy meeting, reflecting a cautious assessment of the current economic landscape. Despite market expectations of rate cuts in 2024, officials are seeking further evidence of disinflation toward the Fed's 2% target before providing additional accommodation.

On February 18, Mary Daly, President of the Federal Reserve Bank of San Francisco, stated that monetary policy needs to remain restrictive until further progress is made on inflation.

Federal Reserve Governor Christopher Waller emphasized that recent economic data support maintaining interest rates steady, with potential rate cuts on the table if inflation follows a similar pattern to 2024. However, he advocated for patience in adjusting policy rates until the inflation outlook becomes clearer, cautioning against policy paralysis due to economic uncertainties.

Fed Governor Bowman said that although monetary policy "is in a good place," she would like to see data reflecting more progress on inflation before further rate cuts.