Three US central bank presidents on Wednesday stressed the need to continue tightening monetary policy, but supported the slowdown in the pace of tightening. The time for the Fed to slow the pace of aggressive rate hikes appears to be approaching as growth in the US consumer price index (CPI) slowed more than expected on Thursday.
Dallas Fed President Logan said at a Fed meeting in Houston: “I think it may soon be appropriate to slow down the pace of rate hikes to allow for a better assessment of how financial and economic developments are developing. I believe that a slowdown should be understood in the sense of more accommodative policies “.
The US October CPI, released this morning, showed that inflation has slowed more than market expectations. “The CPI data is a welcome reassurance, but there is still a long way to go,” said Logan. Not only is inflation well above the Fed’s 2% target, but “aggregate demand still exceeds supply and inflation has repeatedly beat experts’ forecasts,” he said.
US CPI growth, headline and core CPI lower than expected: room to slow rate hike (3)
FOMC interest rate forecast distribution map (dot plot)
Source: Bloomberg
San Francisco Fed Chairman Daly said in a meeting hosted by the European Economic and Financial Center (EEFC) that more interest rate hikes are still on the way.
It is unclear where the final US official rate would be and it could exceed 4.5%, but it would be preferable to get to that level with more caution, he said.
“On the way, we advocate a more gradual approach so that we can find the right rate level as we go,” he said, refusing to acknowledge the cumulative impact of aggressive tightening.
Daly welcomed the October CPI, which showed slowing inflation, but said it was only worth a month of data and was “far from winning” in the fight against inflation.
Philadelphia Fed Chairman John Harker said in a separate meeting: “Given the cumulative tightening we have done so far, we are close enough to a tightening stance that we expect the pace of rate hikes to slow down in the coming months,” he said. .
“The only thing I would like to clarify is that a 50 basis point rate increase (1 basis point = 0.01%) is still significant.” There is no reference to the ICC in the text of Governor Harker’s speech.
Original title:Fed officials see reasons for an upcoming slowdown in the pace of rate hikes (3)(extract)
Fed’s Daly says CPI report has good news but it’s just a data point （抜 粋）
The Fed’s Harker expects the pace of rate hikes to slow down in the months ahead(extract)
(Update to add Governor Daly’s remarks)
