US Fed moves closer towards interest rate reduction
Date
7/18/2024 3:46:24 AM
(MENAFN) Federal Reserve Governor Christopher Waller indicated on Wednesday that the Fed is nearing a decision to cut interest rates as inflation shows signs of easing. Speaking at the Federal Reserve bank of Kansas City, Waller noted that recent data from the second quarter suggested progress towards achieving price stability.
He highlighted that economic indicators over the past months have pointed to moderate growth, with the labor market balancing supply and demand, and inflation slowing from earlier peaks. The latest figures from the Labor Department indicated a slight easing in inflation, with the consumer price index (CPI) rising 3 percent annually in June, down from 3.3 percent in May, and showing a minor decline from the previous month.
Waller expressed confidence that current economic data align with achieving a "soft landing," indicating a gradual easing of economic growth to a sustainable level. He emphasized the importance of upcoming data in solidifying this assessment, suggesting that while the final decision hasn't been reached, conditions are approaching where a reduction in the policy rate would be justified.
Discussing possible scenarios for inflation in the second half of the year, Waller outlined an optimistic outlook where favorable CPI data continues to support a rate cut in the near future. However, he also acknowledged a more likely scenario where inflation data remains mixed—showing improvement from earlier highs but with uncertainties that could delay immediate rate adjustments.
Overall, Waller's remarks underscored the Fed's cautious approach towards monetary policy, balancing economic indicators with inflationary pressures to ensure sustained economic stability and progress towards its inflation goals.
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