The Fed’s Kugler, Daly says the job is not done to control inflation By Reuters

By Ann Saphir

(Reuters) – Two Federal Reserve policymakers on Saturday said they felt the U.S. central bank’s job in curbing inflation was not done, but neither wanted to risk damaging the labor market in the process.

The comments, from Governor Adriana Kugler and San Francisco Fed President Mary Daly, underscored the delicate balancing act facing the U.S. central bank this year, after lowering short-term rates by a full percentage point last year. year.

Fed policymakers in December signaled that they expect to reduce rates in a slower year to bring inflation, which registered 2.4% in November, up to the Fed’s 2% goal.

© Reuters. Federal Reserve Bank of San Francisco President Mary Daly and Federal Reserve Board Governor Adriana Kugler speak as they attend the annual conference of the American Economics Association, in San Francisco, California, US January 4, 2025. REUTERS/Ann Saphir

“We know we’re not there yet — nobody’s popping the 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 rapidly. In November, unemployment was 4.2%.

“At this point, I don’t want to see a further slowdown in the labor market — maybe gradually moving in bumps and chunks a month, but certainly not a further slowdown in the labor market,” Daly said. , who spoke on the same panel.

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