economy online news

By Daniel Avis

The US Federal Reserve’s fight against inflation seems to be heading in the right direction, while the US economy remains resilient, a senior Fed official said Wednesday. online news

The Fed has aggressively raised interest rates over the last 18 months to their highest level in 22 years as it works to bring inflation down to its long-term target of two percent.

Inflation at the consumer level has slowed sharply since peaking last summer but it remains elevated, while the economy is showing signs of continued resilience.

“In the last few months, we’re finally getting very good inflation data that we wanted,” Fed Governor Christopher Waller told a conference in Utah.

“If this continues, we’re pretty much back to our target,” added Waller, who is a member of the Fed’s rate-setting committee.

In recent months, the Fed has slowed down the pace of its rate hikes in a bid to lower inflation without dragging the US into a recession — a feat known as a soft landing.

Waller told the conference in Utah that the underlying economic picture remains strong.

“The economy is just really booming, GDP growth may come in over four percent for the third quarter after being roughly two percent for the last four,” he said.

“So we’re in this position where we kind of watch and see what happens on rates.”

Earlier Wednesday, Fed Governor Michelle Bowman, who also sits on the rate-setting Federal Open Market Committee (FOMC) took a more hawkish view on the likely path of future rate policy.

While “domestic spending has continued at a strong pace, and the labor market remains tight,” inflation remains too high, she told a conference in Morocco, according to prepared remarks.

“This suggests that the policy rate may need to rise further and stay restrictive for some time to return inflation to the FOMC’s goal,” she said.

Futures traders currently assign a probability of more than 90 percent that the Fed will leave its benchmark lending rate unchanged next month, according to data from CME FedWatch.

da/dw