(Finance) – “Although total inflation has fallen significantly from its recent peak, it remains elevated, and progress to sustainably bring it back to our 2% target will likely continue to be bumpy. Indeed, core inflation , which historically provides a good indication of future inflation trends, has still a long way to go to get back to our goal“. This was stated by the president of the Federal Reserve of Boston, Susan Collinsat an event at the Tuck School of Business at Dartmouth College.
According to the central banker, “it is more time is needed to have greater confidence in the prospects. The emphasis here is on “major,” because I expect the economy will eventually slow as we see the full effects of past monetary policy actions take hold. But I also predict that the ride will continue to be bumpy and we should not overreact to individual data readouts.”
Furthermore, Collins believes “that i risks linked to the outlook have reached a better balance. It is essential not to ease policy too soon, to ensure that price stability is restored. At the same time, waiting too long would risk slowing down too much.”
The Fed official remains what she calls a “realistic optimist” in believing that the economy is on track for 2% inflation on a sustained basis, while maintaining a healthy labor market. “The economy is overall in good shape and policy is well positioned as policy makers they carefully evaluate the evolution of data and prospects,” he said.
“I want to see more evidence of a sustained trajectory towards price stability,” he highlighted. “However, in line with the projections of FOMC participants, I think it will likely become It is appropriate to begin easing monetary policy by the end of the year“.
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