Fed’s Kugler says her expectations for Fed Funds consistent with March FOMC projections

Federal Reserve Board Governor Adriana
Kugler.

Headlines via Reuters:

• My policy rate expectation is consistent with March FOMC meeting
  policymaker projections
• If disinflation and
  labor market conditions proceed as i am currently expecting, then
  some lowering of the policy rate this year would be appropriate
• Expect
  disinflationary trend to continue
• Policy is currently
  restrictive, and my baseline expectation is that disinflation will
  continue without a broad economic slowdown
• Such an outcome is
  not assured
• Inflation progress
  has sometimes been bumpy
• Annual core PCE at
  2.8% represents ‘considerable progress’ but is still ‘meaningfully
  above’ Fed’s 2% target
• Data on new tenant
  rent agreements suggest that housing inflation broadly will continue
  to cool
• Continued
  disinflation will indeed require further progress in housing and
  non-housing services
• Labor market has
  moved into better balance
• Suspect strong
  population growth ‘helps resolve the puzzle’ of labor market growth
  and strong consumption even as inflation eases
• Important that wage
  growth be consistent with 2% inflation over time; US is moving back
  toward that kind of wage growth
• Anchored inflation
  expectations are evident in consumer and business surveys
• Expect consumption
  growth to slow some this year
• Consumer spending
  was soft in January and February, suggesting we are on track for
  lower consumption growth in q1 vs second half of 2023
• Expect GDP growth
  this year to be solid but slower than 2023 pace of 3.1%
• My baseline
  expectation is that further disinflation can be accomplished without
  a significant rise in unemployment
• Appears supply
  networks are adapting to port of Baltimore disruption

Bolding above is mine. ‘Meaningfully above’ doesn’t sound to me like we get a rate cut in two months. But, I’ve been like a broken record on this (kids, ask an oldie what being a broken record means).

This article was written by Eamonn Sheridan at www.forexlive.com.