MNI: Fed Gov Kugler Flags Slow And Uneven Inflation Progress
MNI (WASHINGTON) - Federal Reserve Governor Adriana Kugler said Friday inflation remains elevated and has been slow to return to 2% while the labor market remains healthy, and she'll be watching carefully the economic impacts of President Donald Trump's new policies.
"We reduced our policy rate 100 basis points through December, but the recent progress on inflation has been slow and uneven, and inflation remains elevated. There is also considerable uncertainty about the economic effects of proposals of new policies," she said in remarks prepared for the Economic Club of Miami.
"Going forward, in considering the appropriate federal funds rate, we will watch these developments closely and continue to carefully assess incoming data, the evolving outlook, and the balance of risks."
The latest jobs report Friday showing U.S. employers created 143,000 jobs in January and the unemployment rate edging down to 4% is "consistent with a healthy labor market that is neither weakening nor showing signs of overheating," she said. Growth is also expected to stay solid in the first quarter. (See: MNI INTERVIEW: Fed Likely On Hold For Most Of 2025-Kroszner)
The economy has been able to expand in recent months without putting pressure on prices because of rising productivity growth, Kugler said. Some of that has come from one-off factors but investments in artificial intelligence appear to be accelerating and could deliver a potentially "revolutionary and persistent" boost to productivity, she said.