Two authorities of the Federal Reserve They said Saturday that they believe the central bank’s job to control inflation is not over yet, but they also do not want to risk damaging the labor market in the process.
The comments, of the Governor Adriana Kugler and San Francisco Fed President Mary Daly They highlight the delicate balance the Fed faces this year, after cutting short-term rates by one percentage point last year.
Fed policymakers signaled in December that they hope to reduce rates more slowly this year to slow inflation, which hit 2.4% in November, toward the 2% target.
“We are fully aware that we are not there yet, no one is popping champagne corks anywhere”Kugler said at the American Economic Association’s annual conference in San Francisco. “And at the same time … we want the unemployment rate to stay where it is” and not increase rapidly. In November, unemployment was 4.2%.
“At the moment, I would not like to see a further slowdown in the labor market, perhaps a gradual movement in bumps and chunks in a given month, but certainly not a further slowdown in the labor market,” said Daly, who spoke on the same panel.
