Fed official points to inflation growth, suggests further rate hikes may be unnecessary
Date
5/22/2024 4:01:29 AM
(MENAFN) A senior official from the US Federal Reserve indicated that the central bank's efforts to combat inflation likely made progress last month, hinting that additional interest rate hikes might not be needed. This perspective comes after a decline in consumer inflation in April, which provided relief to Federal Reserve policymakers following a slight rise in the first quarter that had raised concerns about the necessity of maintaining high interest rates, the highest in two decades.
Federal Reserve Governor Christopher Waller, speaking at a conference in Washington, stated that the inflation data for April suggest a resumed progress towards the central bank's long-term goal of 2 percent inflation. He noted that while one month of data does not establish a trend, the figures indicate that the policies aimed at reducing aggregate demand are succeeding, which should support ongoing progress in reducing inflation.
Waller, a member of the Federal Reserve's interest rate-setting committee, emphasized the cautious nature of interpreting these figures. He advised that central bank officials should remain flexible, but the current data suggest that inflation is not accelerating, reducing the necessity for further interest rate increases. This more optimistic outlook from Waller might be well-received by financial markets, which have been subject to a range of less optimistic forecasts from other Fed officials since the onset of the inflation surge.
Over the weekend, Michael Barr, the Fed's Vice Chairman for Supervision and another permanent member of the interest rate-setting committee, expressed that the recent data did not give him the "increased confidence" required to support easing monetary policy. In contrast, Waller's statements on Tuesday offered a more hopeful, albeit cautious, view on the inflation front, suggesting a potential pause in the central bank's cycle of rate hikes if current trends continue.
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