More from Fed’s Kugler – We do not want the labour market to weaken further

Federal Reserve Governor Kugler speaking in Q&A now

• We’re at a place where we don’t want labour market to weaken further
• Makes sense to shift attention to employment mandate.
• Inflation measures excluding housing are near 2%, but that’s not what we target.
• We are making very good progress, but not at 2% yet.
• I don’t see that we will overshoot on inflation.
• It will still take us some time to get to 2% inflation.
• We have begun to recalibrate rates
• we need to continue normalizing rates
• Maybe some Fed policy makers would be willing to move expected 2025 rate cuts forward to 2024, or vice versa, depending on data
• We don’t pay a whole lot of attention to the neutral rate because there is a lot of uncertainty about it
• below 100K monthly job gain would be ‘very low’, must be mindful of potential downward revisions.
• Breakeven number for monthly job gains is anywhere from 100K to 240K.
• Policy is restrictive.
• With disinflation, we need to cut even to just keep where we are in terms of restriveness.

Kugler spoke earlier:

• Fed’s Kugler says she strongly supported 50 bps rate cut

Its not just me picking up on the new script, is it?

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