Two Federal Reserve officials said Saturday they felt the U.S. central bank’s work to control inflation is not yet complete, but they also signaled they did not want to risk hurting the job market as they try to complete that task. .
Comments from Director Adriana Kugler and San Francisco Fed President Mary Daly highlight the delicate balancing act facing U.S. central bankers this year as they seek to slow the pace of rate cuts.
The Fed last year to a current range of 4.25% to 4.50%.
Inflation, by the Fed’s preferred measure, is well below its peak of about 7% in mid-2022, registering 2.4% in November. Still, that figure is above the Fed’s 2% target, and in December officials projected slower progress toward that goal than they had previously anticipated.
“We are fully aware that we are not there yet – no one is popping champagne anywhere,” Kugler said at the American Economic Association’s annual conference in San Francisco. “And at the same time… we want the unemployment rate to stay where it is” and not rise quickly.
In November, the unemployment rate was 4.2%, which, in her and her colleague Daly’s opinion, is compatible with full employment, the Fed’s second goal, along with the goal of price stability.
“At this point, I wouldn’t want to see an additional slowdown in the job market — maybe a gradual shift at some points in a given month, but certainly not an additional slowdown in the job market,” said Daly, who spoke on the same panel .
They were not asked, nor did they give their opinions, about the possible impact of new President Donald Trump’s economic policies, including tariffs and tax cuts, which some speculated could fuel growth and reignite inflation.
