Both officials suggest borrowing costs may need to remain restrictive for potential rate cuts
Federal Reserve officials Waller and Barr have expressed concerns about inflation data in 2024
Fed's preferred inflation gauge registered 2.7% in March
Governor Waller considers rate cut towards end of 2024 if data softens
Vice Chair Barr emphasizes importance of seeing clear evidence of easing inflation before considering rate cuts
Federal Reserve officials, including Governor Christopher Waller and Vice Chair for Supervision Michael Barr, have expressed concerns about the current state of inflation data in 2024. Both officials have suggested that borrowing costs may need to remain restrictive for some time before any potential rate cuts can be considered.
Governor Waller stated on CNBC that if data continues to soften over the next three to five months, the Federal Reserve could consider lowering rates towards the end of 2024. He added that if enough data points in the right direction, a rate cut could be considered at that time.
Vice Chair Barr expressed disappointment with inflation data so far this year and stated that borrowing costs should remain in restrictive territory 'some further time' to continue their work. The Fed's preferred inflation gauge, the Personal Consumption Expenditures price index, registered 2.7% in March.
Both officials have emphasized the importance of seeing clear evidence of easing inflation before considering any rate cuts. Payroll gains have been solid, but internal labor market metrics indicate signs of loosening in the ultra-tight labor market that had driven up wages to levels inconsistent with the Fed's 2% inflation goal.
Despite recent data suggesting that inflation appears to be easing, neither Waller nor Barr has indicated any support for rate cuts at this time. The Federal Reserve is currently focused on bringing down inflation and maintaining price stability.
Federal Reserve Governor Christopher Waller believes that further interest rate increases are probably unnecessary based on recent data showing easing inflation.
Payroll gains have been solid but internal labor market metrics indicate signs of loosening.
Accuracy
Federal Reserve Governor Christopher Waller suggested the possibility of a rate cut towards the end of 2024 if data continues to soften.
Data softening for the next three to five months could lead to a rate cut by the Federal Reserve later in 2024.
Federal Reserve Vice Chair for Supervision Michael Barr expressed disappointment with the inflation data in 2024
Borrowing costs should remain in restrictive territory ‘some further time’
The Fed’s preferred inflation gauge, the Personal Consumption Expenditures price index, registered 2.7% in March
Accuracy
Markets are anticipating that the Fed will roll out two interest rate cuts later this year, but some officials have suggested that any such moves are on hold until they can confirm that inflation is sustainably easing towards 2%
