MNI BRIEF: SF Fed’s Leduc Says Making Progress On Inflation

The Federal Reserve is making progress in its fight to bring inflation back to target but there’s still a way to go before a resilient economy gets back to price stability, San Francisco Fed research director Sylvain Leduc said Thursday.

“There’s progress that we've made but there’s still a lot left to be done. We are still way above our target, but things are moving in the right direction," he said. “It’s going to take time for inflation to come back down to 2%,” Leduc added, agreeing with the median FOMC view in the SEP that this goal won’t be reached until 2026.

“There’s going to be some pain in the labor market that will come with that but we’re not foreseeing a recession," he said in a Q&A sponsored by the San Francisco Fed. (See MNI INTERVIEW: Labor Hording Raises Odds Of Soft Landing)

The SF Fed research director said he is heartened by decline in one-year inflation expectations back to prepandemic levels.