United States Federal Reserve Board of Governors member Philip Jefferson underlined that the latest reading of the core inflation was “discouraging,” pointing to a slower-than-projected rate of decline in core goods prices. “Supply and demand imbalances in the goods sector seem to be resolving less quickly than expected,” the policymaker said in a speech before Standford University’s Hoover Institution. “I expect slower consumer spending growth over the remainder of the year in response to tight financial conditions, depressed consumer sentiment, greater uncertainty, and declines in overall household wealth and excess savings,” Jefferson explained, but argued that the Federal Reserve’s monetary policy is “well on track.”
Fed’s Goolsbee: Inflation is too high, but going down
United States Federal Reserve Bank of Chicago President Austan Goolsbee remarked on Friday that inflation is still too high, “but at least it is coming down.” Speaking to PBS, Goolsbee expressed his hopes inflation can fall without the country’s economy entering a recession. Earlier this week, Goolsbee warned that recession is still a “possibility” and noted it is still too early to know what stance the Fed will take regarding raising interest rates during the Federal Open Market Committee’s (FOMC) meeting in June.
Bullard (PCE) only slightly decreased
Federal Reserve Bank of St. Louis President James Bullard said at a conference hosted by Stanford University’s Hoover Institution on Friday that inflation is still too high, “but at least it is coming down.” The inflation rate for personal consumption expenditures (PCE) has only slightly decreased from the peak levels seen last year. Bullard pointed out that prospects for disinflation remain favorable, but “not guaranteed.” “Monetary policy is now at the low end of what is arguably sufficiently restrictive given current macroeconomic conditions,” NN: Any trading strategy that assumes the Fed will be lowering interest rates any time soon is doomed to failure. In fact you have to include in your calculations that inflation is really not coming down bases the Feds preferred indicator the core PCE. And in fact they will continue to raise rates even further.