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FED: Gov Kugler: "Some Way To Go" On Inflation

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Gov Kugler (leans dove, permanent FOMC voter) reiterates her patient approach to further Fed easing in a speech Thursday (link here - "in considering the appropriate federal funds rate, we will watch these developments closely and continue to carefully assess the incoming data and evolving outlook.")

  • Those "developments" are of course government policy shifts: "The potential net effect of new economic policies also remains highly uncertain and will depend on the breadth, duration, reactions to, and, importantly, specifics of the measures adopted."
  • On Feb 7 she said that rates were likely to be held for "some time" while describing the January employment report as "consistent with a healthy labor  market that is neither weakening nor showing signs of overheating.
  • Today she notes that "the path [of inflation] continues to be bumpy and inflation remains somewhat elevated."
  • Her latest comments come after the CPI and PPI inflation data - her take is that “Readings last week from the BLS showed price pressures persisted in the economy in January.”, and provides a core PCE estimate of 2.6% in January (in line with what other officials have projected).
  • She comments that "those readings show there is still some way to go before achieving the FOMC's 2 percent objective."
  • Kugler's speech discusses the Phillips Curve in depth (she is a labor economist), but stops short of delivering any decisive conclusions on what her analysis means for near-term monetary policy (“I think a clear lesson is that no single model alone can give a policymaker an understanding of every possible state of the economy").
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Gov Kugler (leans dove, permanent FOMC voter) reiterates her patient approach to further Fed easing in a speech Thursday (link here - "in considering the appropriate federal funds rate, we will watch these developments closely and continue to carefully assess the incoming data and evolving outlook.")

  • Those "developments" are of course government policy shifts: "The potential net effect of new economic policies also remains highly uncertain and will depend on the breadth, duration, reactions to, and, importantly, specifics of the measures adopted."
  • On Feb 7 she said that rates were likely to be held for "some time" while describing the January employment report as "consistent with a healthy labor  market that is neither weakening nor showing signs of overheating.
  • Today she notes that "the path [of inflation] continues to be bumpy and inflation remains somewhat elevated."
  • Her latest comments come after the CPI and PPI inflation data - her take is that “Readings last week from the BLS showed price pressures persisted in the economy in January.”, and provides a core PCE estimate of 2.6% in January (in line with what other officials have projected).
  • She comments that "those readings show there is still some way to go before achieving the FOMC's 2 percent objective."
  • Kugler's speech discusses the Phillips Curve in depth (she is a labor economist), but stops short of delivering any decisive conclusions on what her analysis means for near-term monetary policy (“I think a clear lesson is that no single model alone can give a policymaker an understanding of every possible state of the economy").