Fed, interest rates
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Federal Reserve Governor Michael Barr said the US central bank needs to proceed with caution in considering additional interest-rate cuts with inflation still running a full percentage point above its target.
Several Federal Reserve district bank presidents have voiced concern this month about persistent inflation and cautioned against more reductions in borrowing costs.
The recent focus on the Federal Reserve has brought renewed public scrutiny of an institution that hasn’t been able to catch a break.
Federal Reserve Bank of St. Louis President Alberto Musalem said officials should move cautiously with further interest rate reductions with inflation running above the central bank’s 2% target.
The Federal Reserve is split over whether to cut interest rates again next month, as the central bank's internal divisions have become unusually sharp, with officials debating how to steer an economy facing opposing forces: persistent inflation and a labor market that's losing momentum.
"Instead, tariff shocks appear to act as aggregate demand shocks—moving inflation and unemployment in the same directions."
U.S. businesses' year-ahead inflation expectations ticked down to +2.2% in November from +2.3% in October, marking the lowest rate since January, according to a Federal Reserve Bank of Atlanta survey released Wednesday.