Fed officials steer cautiously toward potential rate cuts
-Federal Reserve officials, encouraged by recent data, are looking for confirmation that inflation is sustainably cooling and for any warning signs from a still-strong labor market as they steer cautiously toward what most expect to be an interest rate cut or two by the end of this year.
While more progress is required, Kugler said,"I believe economic conditions are moving in the right direction." Other Fed officials speaking on Tuesday were more reticent than Kugler about their policy path outlooks. "I will need to observe a period of favorable inflation, moderating demand and expanding supply before becoming confident that a reduction in the target range for the federal funds rate is appropriate. These conditions could take months, and more likely quarters to play out," Musalem told the CFA Society St. Louis.Some other Fed officials on Tuesday stressed the Fed's commitment to making decisions based on incoming economic data.
"I'm not going to make a prediction" about the exact path of policy. What happens"depends on how the data evolves," he said."I think that things are moving in the right direction" for an eventual easing."It is too soon to determine whether inflation is durably on a path back to the 2% target," Collins told a group in Lawrence, Massachusetts.
"We will learn a lot more over the next several months and I think we are well positioned from a policy standpoint to react," he said.
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