Fed governor optimistic about progress on inflation

Adriana Kugler, who has voting rights, says Fed could hold interest rates steady if progress on disinflation stalls

By Ovunc Kutlu

ISTANBUL (AA) - US Federal Reserve Gov. Adriana Kugler said she is optimistic about the progress on inflation.

"The pace of inflation continues to slow," she said Wednesday during a speech at the Brookings Institution in Washington, D.C.

"Twelve-month inflation, as measured by the personal consumption expenditures (PCE) index, was 2.6 percent in December, down from its peak of 7.1 percent in June 2022. And the six-month rate for PCE inflation was even lower, at 2 percent," she added.

Kugler, who has voting rights in the Federal Open Market Committee (FOMC) this year, said the slowing in total and core PCE inflation over the past year is "the most dramatic" since the early 1980s.

She noted that the FOMC uses PCE inflation for its 2% target and also looks into core PCE inflation, which excludes more volatile food and energy prices as an indication of the underlying inflation trend.

The Fed governor, however, warned that if progress on disinflation stalls, it may be appropriate for the FOMC to hold interest rates steady at its current level for longer.


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