The Fed is increasingly expected to hold its policy rate steady in the 5.25%-5.5% range until mid-September, more than a year past its last rate hike, and to then cut rates just twice before year-end. As recently as March most Fed policymakers saw at least three rate cuts by year’s end.
But inflation in the first three months of the year was higher than most forecasters had anticipated, raising doubts about the wisdom of beginning to ease policy without greater progress toward the Fed’s 2% goal.
Meanwhile consumer spending has been strong and so has the labor market, with unemployment at 3.8% last month, hardly cause for concern that the current stance of policy is too tight.
Daly said on Monday she does not want to end up with a too-strong, or a too-weak, policy response, and that she needs to be confident that inflation is headed toward 2% before she would want to easy policy.
Source: Economy - investing.com
