Adriana Kugler, a member of the Board of Directors of the U.S., spoke on Wednesday, February 7, 2024 at the U.S. economy in Washington, DC.
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Fed Governor Adriana Kugler warned that inflation could prove sticky and prices could rise again, suggesting that the U.S. central banks should keep interest rates stable at that time.
“I’m actually very worried about some of the persistence of inflation,” she told CNBC’s Silvia Amaro during a fire chat on Friday.
She noted that inflation expectations have accelerated recently, and she said she was paying close attention to their impact on how businesses set prices and how workers negotiate wages. In turn, this means they can feedback to inflation.
Some recent data points show consumer concerns about rising prices, the latest Consumer Confidence Index From the meeting committee exhibit The 12-month inflation forecast jumped to 6% in February, up from 5.2% last month.
“I have always been one of those people who firmly support good inflation expectations. I think it’s important and it’s in our favor,” Kugler said.
Looking ahead, the Federal Reserve’s Kugler said prices could rise again.
“I think you know there is reason to believe that price increases and ongoing inflation may increase,” she said. She added that higher prices could come from “some policies that may be under consideration and some policies that have been implemented.”
Kugler pointed out that such policies could also affect economic activity.
“We may need to consider some of the durability I mentioned because of the different prices, due to the expected inflation, which may be because of some of the new policies we are leading the way,” Kugler said.
“There is still a lot of uncertainty” when the Fed’s Kugler talks about the frequent changing developments surrounding the U.S. government’s decision to impose tariffs on goods imported from major trading partners, including negotiations and potential retaliatory moves.
Analysts and economists have broadly stated that they expect potential tariffs, any reciprocal measures, could make prices higher in countries with measures.
Get ready Comment Kugler paid for the meeting, and she also warned that inflation risks also put the Fed’s outlook on interest rates.
“Given the latest increase in inflation expectations and the increase in key inflation categories that have not yet shown progress towards our 2% target, it is appropriate to continue to maintain its current level of policy rates for some time,” she said in a speech.
The Fed’s total percentage has dropped three times since September before remaining stable January. The bank’s overnight lending rate is currently between 4.25% and 4.5%.
according to CME Group’s FedWatch Toolthe chances of traders being last priced at a central bank will also remain the same when they meet later this month. The photo then seems less clear, with about 63% interest rates also held at the Fed meeting before the tax cuts were lowered in June.
