On July 18, San Francisco Federal Reserve Bank President Mary Daly said she wanted to reinforce confidence in the possibility of inflation returning to the 2% target before calling for an interest rate cut.
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| Fed official: US economy still lacks price stability. (Source: iStock) |
Speaking at a Fed event in Dallas, Ms. Daly said that the US economy still lacks price stability and the Fed has not yet achieved its goal of bringing inflation back to 2% in a sustainable manner.'
Still, Ms. Daly stressed that monetary policy is currently in a state of balance.
"There is a risk that the Fed will act too soon to normalize interest rate policy, causing inflation to be stuck below or above its target. In addition, there is a risk that the bank will maintain interest rates for too long, causing the labor market to fluctuate," she emphasized.
The San Francisco Fed president also warned of patience in the face of the prospect of rate cuts, saying Fed officials must balance the “cost” of acting quickly and making mistakes.
Avoiding policy mistakes is important, says Daly.
The Fed is expected to cut rates in September 2024, but some believe the central bank should act at its July 2024 meeting as price pressures ease.
The Beige Book survey of economic conditions released by the Fed on July 17 predicted that the US economy will slow down in the next 6 months, due to uncertainties related to the presidential election, domestic policy, geopolitical conflicts and inflation.
Source: https://baoquocte.vn/quan-chuc-fed-len-tieng-ve-viec-my-cat-giam-lai-suat-nhac-den-cai-gia-phai-tra-279286.html
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