Interest rate messages from Fed officials
Fed officials claimed they were in no rush to cut interest rates.
Fed officials suggested they were in no rush to cut interest rates, saying the central bank should keep borrowing costs higher for longer as policymakers wait for more evidence that inflation is easing.
Speaking separately on Thursday, Cleveland Fed President Loretta Mester, New York Fed President John Williams and Richmond Fed President Thomas Barkin argued that it may take longer for inflation to reach the 2 percent target.
“Incoming economic data suggests it will take longer to gain that confidence. It would be prudent at this point to maintain our restrictive stance for longer while we gain clarity on the path of inflation,” Mester said at an event in Ohio on Thursday.
The Cleveland Fed president said he expects price growth to slow more slowly than last year as downward pressure from improvements in supply chains eases.
Mester, who voted on policy decisions this year, will resign at the end of June when his term ends. He echoed comments he made earlier this week, saying the policy was well positioned and that it was too early to say that progress in inflation had stalled.
Williams made similar comments in a Reuters interview published on Thursday, saying he saw no reason to adjust monetary policy at this time. “I don’t expect to get the confidence we need to see that inflation will move towards the 2 percent target in the very near term,” he said.
“It will take time to reach 2 percent”
Speaking on CNBC on Thursday, Barkin said demand needs to cool further to bring price growth to the Fed’s target, noting that commodity inflation has fallen significantly as supply chains improve.
“I think it’s going to take a little bit more time to get to 2 percent in a properly sustainable way,” said Barkin, who also voted on policy decisions this year.
Speaking on Thursday, Atlanta Fed President Raphael Bostic said he was grateful for the cooling seen in the last report. But he also said he would monitor May and June data to make sure the numbers don’t reverse.