by Howard Schneider
(Reuters) – The Federal Reserve hasn’t made much progress in bringing inflation back to the 2% target despite rate hikes it began a year ago, one of its Feds Christopher Waller said on Friday. which advocates continued monetary tightening.
Key measures of core inflation have “basically moved sideways, with no apparent downward movement,” Christopher Waller said in a speech written for his presentation at the Graybar National Training Conference in Texas.
The rise in the consumer price index, which excludes food and energy, accelerated slightly in March to stand at 5.6% over one year, against 5.5% in February.
Christopher Waller said it was uncertain whether the banking stress would lead to an unexpected tightening of credit conditions and a much-needed slowdown in the economy, as the stability of financial markets demonstrated that the Fed had been right to raise rates at its last meeting and to maintain the focus on fighting inflation.
“Monetary policy needs to be tightened further. The extent of this tightening will depend on new inflation figures, the real economy and the extent to which credit conditions tighten,” Christopher Waller said.
So far, the economy and inflation remain stronger than he thought, he added.
“Economic output and employment continue to grow at a healthy pace while inflation remains far too high,” the governor continued, stressing that investors should not expect interest rates to drop. in the near future.
“Monetary policy will have to stay tight for a long time, longer than markets expect,” he said.
(Howard Schneider, French version Laetitia Volga, edited by Blandine Hénault)
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