2023-08-15 23:14:54
The head of the Federal Reserve branch in Minneapolis said that US inflation may be heading in the right direction, but it is too early for the central bank to declare victory in the battle to contain it.
“I can’t say we’re done with it, but I see positive signs,” Neil Kashkari, head of the Minneapolis Federal Reserve branch, stressed during a seminar in the city.
The Federal Reserve raised interest rates 11 times since last year in an attempt to curb inflation, which by a large margin exceeded the 2 percent target rate of the US Central Bank.
However, despite the significant decrease in the inflation rate in recent months, it is still above the target rate of 2 percent, especially if volatile food and energy prices are excluded.
Kashkari said that with inflation moving in the right direction, it is possible for the Federal Reserve to “take a longer period of time collecting more data” before deciding to continue raising interest rates.
Futures traders are now nearly 90 percent likely that the Federal Reserve will vote to keep interest rates unchanged at its designated meeting next month, according to CME Group data.
In response to a question regarding when the Federal Reserve will start cutting interest rates, Kashkari said, “I want to see convincing evidence that inflation is already going downward towards 2 percent,” noting that following that it takes some time.
He stated that the Federal Reserve may start cutting the “nominal” interest rate next year if the rate hike continues to slow.
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