Source: Zhitong Finance
Two Federal Reserve officials have reiterated that interest rates will remain high for a longer period of time.
Two Federal Reserve officials have reiterated that interest rates will remain high for a longer period of time, stressing the need to be patient as the Federal Reserve waits for more evidence that inflation is falling.
Cleveland Federal Reserve Chairman Loretta Mester said at a symposium hosted by Atlanta Federal Reserve Chairman Raphael Bostic on Tuesday that she hopes to see “several months of inflation data seem to be declining” before cutting interest rates.
Boston Federal Reserve Chairman Susan Collins also attended the Atlanta Federal Reserve Financial Markets Conference. She said she would like to see more evidence that price pressure is moving towards the Fed's 2% target.
“I think this is a time that requires patience. I think the data is very complicated,” Collins said. “It's taking longer than I thought before.” Collins has no vote on monetary policy this year.
She added that current policies may further drag down the economy in the future.
Improving inflation
Federal Reserve officials welcomed the latest consumer price data. The data shows that one of the key measures of potential inflation slowed in April for the first time in six months.
Meanwhile, several Federal Reserve officials emphasized that more evidence is needed that inflation continues to move towards the 2% target before the benchmark interest rate is lowered. Since July of last year, the US benchmark interest rate has been at a 20-year high.
Federal Reserve Governor Christopher Waller said on Tuesday that if there is good inflation data for several more months, the Federal Reserve may consider cutting interest rates later this year.
Bostic reiterated his view earlier on Tuesday that inflation will continue to decline slowly and that the Federal Reserve's policies are restrictive.
Mester will step down after his term expires in June. She said on Monday that given the disappointing inflation data for the first quarter, she no longer sees fit to cut interest rates three times in 2024.
Bostic and Mester have the right to vote on monetary policy in the Federal Open Market Committee (FOMC) this year.