[10th Reuters] - US Federal Reserve (FRB) Director Bowman po...
[10th Reuters] - US Federal Reserve (FRB) Director Bowman pointed out on the 10th that the inflation rate has “uncomfortably” exceeded the target of 2%, and even though there is an upward risk, further progress “should be welcomed” has been made in the past few months. The usual hawkish attitude was slightly weakened.
In the presentation preparation manuscript, it was stated that “if the data to be announced in the future continues to show that the inflation rate is continuously moving towards the 2% target, it will be appropriate to gradually lower the federal fund interest rate (FF interest rate) and prevent monetary policy from becoming excessively restrictive on economic activity and employment.”
On top of that, it was pointed out that “patience is necessary so as not to overreact to a single data and impair the continuous progress of the decline in the inflation rate.”
The FRB left the IMF interest rate guidance target unchanged at 5.25-5.50% at the end of last month, but it suggested that if inflation continues to slow down, there is a possibility that interest rate cuts will be implemented as early as September. [NL4n3jn2j]
Director Bowman did not rule out the possibility of interest rate cuts next month.
The FRB will obtain further economic data by the September meeting, and it was pointed out that it would deepen insight into how recent changes in financial markets will affect the economic outlook.
Also, they did not repeat previous statements that they are prepared to raise interest rates in the future if necessary.
They kept policy interest rates unchanged and maintained their own basic scenario where the inflation rate would continue to decline, but they expressed skepticism about whether price pressure this year would ease as rapidly as last year.
Risks to the FRB's two responsibilities of price stability and employment maximization are becoming more balanced, and it was suggested that they are more concerned about inflation.
Regarding the fact that the unemployment rate in July rose to a high level of 4.3% for the first time in about 3 years, Mr. Bowman stated that “there is a possibility that the rate of deceleration in the labor market has been exaggerated,” and mentioned that dismissals are at a low level and that hurricane “Beryl” temporarily slowed employment growth.
Meanwhile, he pointed out that there is a risk that risks such as geopolitical tension will further push up prices. “While keeping an eye on the risk of a significant slowdown in the labor market, we still need to pay close attention to the task of price stability,” he said.
In the presentation preparation manuscript, it was stated that “if the data to be announced in the future continues to show that the inflation rate is continuously moving towards the 2% target, it will be appropriate to gradually lower the federal fund interest rate (FF interest rate) and prevent monetary policy from becoming excessively restrictive on economic activity and employment.”
On top of that, it was pointed out that “patience is necessary so as not to overreact to a single data and impair the continuous progress of the decline in the inflation rate.”
The FRB left the IMF interest rate guidance target unchanged at 5.25-5.50% at the end of last month, but it suggested that if inflation continues to slow down, there is a possibility that interest rate cuts will be implemented as early as September. [NL4n3jn2j]
Director Bowman did not rule out the possibility of interest rate cuts next month.
The FRB will obtain further economic data by the September meeting, and it was pointed out that it would deepen insight into how recent changes in financial markets will affect the economic outlook.
Also, they did not repeat previous statements that they are prepared to raise interest rates in the future if necessary.
They kept policy interest rates unchanged and maintained their own basic scenario where the inflation rate would continue to decline, but they expressed skepticism about whether price pressure this year would ease as rapidly as last year.
Risks to the FRB's two responsibilities of price stability and employment maximization are becoming more balanced, and it was suggested that they are more concerned about inflation.
Regarding the fact that the unemployment rate in July rose to a high level of 4.3% for the first time in about 3 years, Mr. Bowman stated that “there is a possibility that the rate of deceleration in the labor market has been exaggerated,” and mentioned that dismissals are at a low level and that hurricane “Beryl” temporarily slowed employment growth.
Meanwhile, he pointed out that there is a risk that risks such as geopolitical tension will further push up prices. “While keeping an eye on the risk of a significant slowdown in the labor market, we still need to pay close attention to the task of price stability,” he said.
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