Fed official describes lowering inflation to 2% as 'bumpy'

By Ovunc Kutlu

ISTANBUL (AA) - US Federal Reserve Vice Chair of Supervision Michael S. Barr described returning inflation to the Fed's target of 2% could be a "bumpy" path.

Barr said the Federal Open Market Committee (FOMC) officials are confident that they are on a path towards a 2% inflation, but added they need to see continued good macroeconomic data before the FOMC starts the process of reducing interest rates.

"Given the limited historical experience with the growth and inflation dynamics we currently face, and no modern experience of emerging from a global pandemic, we have yet another reason to proceed carefully, as we have been doing," he said Wednesday during a speech at the 40th annual National Association for Business Economics (NABE) Economic Policy Conference in Washington, D.C.

Barr said FOMC members are always assessing the risk of an economic slowdown that could reduce employment, and the risk that inflation does not stay on its path to return to the Fed's goal of 2%.

Consumer inflation figures for January coming in above market expectations on Tuesday fueled worries that the Fed's first interest rate cut this year could be delayed to the second half of the year.

Atlanta Fed President Raphael Bostic said Monday he expects the first interest rate cut in 2024 sometime this summer.

Barr and Bostic have voting rights in the FOMC's monetary policy decisions this year.