Fed Officials See Grounds for Soon Slowing Rate-Hike Pace
The Federal Reserve looked closer to moderating aggressive interest-rate increases after welcome news on inflation, with three officials backing a downshift even as they stressed that policy needs to stay tight.
“While I believe it may soon be appropriate to slow the pace of rate increases so we can better assess how financial and economic conditions are evolving, I also believe a slower pace should not be taken to represent easier policy,” Dallas Fed President Lorie Logan told a conference hosted by her bank in Houston on Thursday.
Data released earlier on Thursday showed consumer prices cooling by more than expected in October, with the consumer price index rising 7.7% from a year earlier versus 8.2% the month before.
“This morning’s CPI data were a welcome relief, but there is still a long way to go,” she said. Not only is inflation far above the Fed’s 2% target, “but with aggregate demand continuing to outstrip supply, inflation has repeatedly come in higher than forecasters expected.”