Michelle Bowman from the US Federal Reserve Board of Governors signalled, today, that 'progress on US inflation seems to have stalled.' Here are the highlights from her speech.
- Core inflation is uncomfortably above the Fed's 2% target. The labor market is near full employment, core inflation is elevated.
- I am concerned, if Fed cuts too much, could overheat the economy. The economy's performance questions view policy is restrictive.
- I want to proceed cautiously and gradually with rate cuts. Lowering the policy rate too quickly could reignite inflation.
- We have made progress lowering inflation, cooling labor market. However labor market data has gotten harder to interpret. Upside risks to inflation remain prominent.
- Economic conditions are very strong, while the Fed still hasn't achieved its 2% inflation target.
- Inflation is the biggest priority when making policy choices. Doesn't take a dissenting vote on policy lightly.
EURUSD retreats today after reaching local high; after US NFP report. As for now, the pair may potentially test 1.05 level again if the lower range of the upward price channel will be rejected as the support.
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Source: xStation5
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