Thursday, November 30, 2023

Is Fed ready to stave inflation?

Two members of the Federal Reserve Board of Governor's spoke to two separate audiences about the reduction of inflation. Both governors have been known to be "hawkish" in the interest of combatting raising inflation with higher rate hikes. The target goal of 2% is definitely manageable in the near future according to both governors. How the U.S. gets to 2% is where the two diverge into separates courses of action. 

Federal Reserve Board of Governor's member Christopher Waller is typically known for favoring higher rates to battle inflation. However, he sees a cut in rates from the central bank as long a price increases can also keep lowering. Meaning as long as the market sees a stable increase of production and consumption then the central bank will be incentivized by lower exceeding rates. 

Federal Reserve Board of Governor's member Michelle Bowman's take on the subject infers the fed will need to further raise rates in order to reach the 2% goal. Bowman urges the dangers in inflation and also does not trust the market or the workforce to continue Waller's thought processes. 

Christopher Waller hedged his statements on reaching their two percent goal by not estimating a time of achievement. Waller explains level of uncertainty the market presents and the belief that the FMOC did enough to achieve price stability. 

https://finance.yahoo.com/news/fed-governors-bowman-waller-clash-on-direction-of-interest-rates-155221195.html

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