Fed’s Barr: Inflation remains too high. If inflation does not moderate soon, will be time for a hike.
Fed Governor Michael Barr’s comments:
- Inflation remains too high.
- Favors holding rates steady if confident inflation is moderating.
- The labor market is stable, with low unemployment.
- The economy is growing solidly, boosted by artificial intelligence investment.
- If inflation does not moderate soon, it will be time for an interest rate hike.
- Persistent inflation above target creates risks.
Fed Governor Michael Barr’s comments lean more hawkish, with a rate hike on the table if inflation does not moderate soon. Although he would favor holding rates steady if inflation is moving lower, his warning that persistent above-target inflation creates risks puts the burden on the data to show improvement.
Meanwhile, solid economic growth, AI investment and a stable labor market with low unemployment suggest little urgency to cut rates. The message: steady rates remain an option, but stubborn inflation could make the next move a hike.
US stocks are looking increasingly more fragile at the open with the S&P index now down -55 points or -0.72%. The Dow futures are down -318.70 NASDAQ futures are down -420 points
This article was written by Greg Michalowski at investinglive.com.