US Fed vice chair Barr finds Q1 inflation figures 'disappointing'

US Fed vice chair Barr finds Q1 inflation figures 'disappointing'

'We are not yet all the way to our target of 2 percent, we need to allow our restrictive policy some further time,' says Michael Barr

By Ovunc Kutlu

ISTANBUL (AA) - US Federal Reserve Vice Chair of Supervision Michael Barr said Monday he thinks inflation readings in the first quarter of this year were "disappointing."

"We have made tremendous progress over the past two years on the inflation component," he said at the 28th Annual Financial Markets Conference held in Fernandina Beach, Florida. "Inflation has fallen from its peak of 7.1 percent to 2.7 percent today. But we are not yet all the way to our target of 2 percent."

Producer inflation in April rose 2.2% annually and 0.5% on a monthly basis, both above market estimates, but the consumer inflation annually rose 3.4% in April, and monthly increased 0.3%, both slowing down from March. The annual figures, however, are still above the Fed's target of 2%.

"These results did not provide me with the increased confidence that I was hoping to find to support easing monetary policy by reducing the federal funds rate. This means that we will need to allow our restrictive policy some further time to continue to do its work," he said.

The probability of a Fed rate cut of 25 basis points at the Fed’s next meeting on June 12 stood at just 2.6% as of Monday, according to the FedWatch Tool provided by the US-based Chicago Mercantile Exchange Group. However, an interest rate cut of 25 basis points on Sept. 18 was at 49.6%.

Barr has a voting right in the Federal Open Market Committee.

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