By Howard Schneider
AMELIA ISLAND, Fla. (Reuters) – U.S. inflation data in the first months of 2024 has been “disappointing,” Fed Vice Chairman for Supervision Michael Barr said on Monday, leaving the central bank to short of the evidence it needs to ease its monetary policy.
“The inflation numbers in the first quarter of this year were disappointing. These results did not give me the increased confidence I was hoping to find to support easing monetary policy,” Barr said in a speech prepared for a Federal Reserve conference in Atlanta. Financial markets.
His prepared speech also delved into financial regulatory issues he oversees.
“We will have to give our restrictive policy a little more time to continue its work,” Barr said, reinforcing the Fed’s overall message that rate cuts, highly anticipated by markets, are on hold until t is clear that inflation will return to the Fed’s 2% level. target.
The Fed’s preferred measure of inflation, the personal consumption expenditures price index, was 2.7% in March and has changed little in recent months after falling steadily last year. April data will be released next week.
Barr said he considered the economy still “strong…We have solid growth and low unemployment.”
But he said he was aware of the risks to both the Fed’s inflation target and its mandate to keep unemployment as low as possible.
Barr said the current policy rate, which has been held in a range of 5.25% to 5.5% since July, was enough for the Fed to “remain stable and monitor changing conditions.”
The next meeting of the US central bank will take place on June 11 and 12.
(Reporting by Howard Schneider, editing by Nick Zieminski)
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