(Finance) – “The promising disinflation in the second half of 2023 came to an unceremonious halt in the first quarter of 2024. I expected bumps in the road, but the “bump” of the first quarter of 2024 threatened to become a hill to climb. However, while the lack of progress towards the inflation target was worrying, inflation did not reignite“. He stated it Patrick Harkerpresident of the Federal Reserve Bank of Philadelphia, during a speech.
“And while remaining very attentive to the risks of inflation, the latest inflation data has been quite promising regarding the resumption of progress on disinflation – he added – But “promising” is not enough to guarantee the confidence I want to have, before cutting rates, that inflation is on a sustainable path to return to target.
Harker believes that the current interest rate, which has been held stable for nearly 11 months, “will continue to be useful for a while yet, keeping us in restrictive territory to bring inflation back to the target level and mitigate upside risks.”
“And if everything goes as planned, I think a rate cut would be appropriate later this year – as well as a medal for me as the best economic forecaster ever – he said – Because any forecast remains just that: a forecast. It’s not a commitment.”
“In fact, I think that two cuts, or none, for this year are entirely possible if the data were to change in one way or another – Harker specified – So, once again, we will remain dependent on the data”.
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