Federal Reserve Governor Christopher Waller said he needed to see it "more" monthscatscrasharenaturbostarsyandexOnly after good inflation data can we start cutting interest rates, but recent data shows that the interest rate cut process may have resumed.
Waller said the consumer price index slowed in April for the first time in six months, indicating that price pressures have not accelerated. He also pointed to weak retail sales this month and signs of slowing in the labor market.
"The latest CPI data is a reassuring sign that inflation is not accelerating, and spending and labor market data show me that monetary policy is in the right environment to put downward pressure on inflation," Waller said in prepared remarks at the Peterson Institute for International Economics on Tuesday.
However, he said recent price data showed only modest progress in the Federal Reserve's 2% inflation target.
"If I were still a professor and had to grade this inflation report, I would be C+--far from failing, but not first-class," he said.
After Waller's speech, the yield on the 2-year U.S. Treasury note rose to its highest level of the day and S & P 500 futures fell.
"Without a significant weakening in the job market, I need to see a few more months of good inflation data before I can safely support a loose monetary policy stance," he added.
The Fed governor said further rate hikes "may not be necessary."
Waller and other Fed officials recently emphasized that the Fed may need to keep interest rates stable for longer than previously expected. Since July last year, policymakers have not adjusted benchmark interest rates, which are currently at their highest level in 23 years.
Although the labor market and economic growth have slowed, the U.S. economy remains generally solid. This year, employers increased their monthly average by 246 per monthcatscrasharenaturbostarsyandexWith,000 jobs, the unemployment rate is 3.9%, which is at a low level. Fed officials generally cited economic performance as a justification to demonstrate their ability to remain patient before implementing interest rate cuts.
"Given that the labor market is so strong, my focus remains on reducing inflation" to achieve the Fed's goals, Waller said.