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MNI INTERVIEW2: Fed To Cut Once At Most This Year- Ghamami

(MNI) WASHINGTON

Sticky inflation means officials must show more patience, former Fed Board economist says.

The Federal Reserve has room to cut interest rates just once later this year at most with inflation staying elevated and a higher neutral rate making monetary policy less restrictive, SEC economist and former Fed board researcher Samim Ghamami told MNI.

“I don’t think the Fed should cut rates in the near-term, not until they are confident that inflation is stable. There’s a significant chance that we get at most one rate cut this year,” he said on MNI’s FedSpeak Podcast. Strong growth and employment also reduce any sense of urgency, Ghamami said.

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The Federal Reserve has room to cut interest rates just once later this year at most with inflation staying elevated and a higher neutral rate making monetary policy less restrictive, SEC economist and former Fed board researcher Samim Ghamami told MNI.

“I don’t think the Fed should cut rates in the near-term, not until they are confident that inflation is stable. There’s a significant chance that we get at most one rate cut this year,” he said on MNI’s FedSpeak Podcast. Strong growth and employment also reduce any sense of urgency, Ghamami said.

Keep reading...Show less