MNI BRIEF: Fed’s Kugler-Inflation Undershoot Not Baseline Case

MNI (WASHINGTON) - Federal Reserve Governor Adriana Kugler said Wednesday she is not worried about inflation falling consistently below the central bank’s 2% target. 

"That's not my main concern. Overshooting is not my baseline,” she said in response questions during a session at Harvard University. 

Given the lags of monetary policy, she said, it was important to "frontload" cuts with last week's larger 50 basis point move. Kugler said the labor market has cooled “but we don’t want to weaken it further” because wage growth has already moderated to levels that are no longer inflationary. (See MNI INTERVIEW: Fed To Slow Cuts As Inflation Lingers-Roberts)