CORRECTS-MNI: Fed Could Pause Cuts - Kugler
(Corrects headline of story published earlier on Nov 14 to say "cuts" (not hikes))
Federal Reserve officials could pause their interest rate cuts if progress on inflation halts or reverses course, Fed Governor Adriana Kugler said Thursday.
"If any risks arise that stall progress or reaccelerate inflation, it would be appropriate to pause our policy rate cuts," Kugler said in prepared remarks for a speech given in Uruguay. She added that "if the labor market slows down suddenly, it would be appropriate to continue to gradually reduce the policy rate."
In a speech touting the benefits of central bank independence, Kugler said the labor market is "cooling but still resilient." Recent data this week point to headline and core PCE inflation of 2.3% and 2.8% respectively for October. (See: MNI INTERVIEW: Fed Cuts To Continue But Neutral Not Far-Tracy)
"While wage moderation and anchored inflation expectations may allow us to continue making progress on inflation, stubborn housing inflation and high inflation in certain goods and services categories may stall progress in reaching our target," she said. "This combination of a continued but slowing trend in disinflation and cooling labor markets means that we need to continue paying attention to both sides of our mandate."