Federal Reserve Governor Christopher Waller on Friday, September 20, during a conversation with media representatives, said that this week at a meeting of the central bank of the United States on monetary policy, he supported the decision to cut interest rates by a half percentage point rate, since the currently observed rate of decline in the inflation rate turned out to be faster than his preliminary expectations regarding the degree of intensity of the relevant process.
Mr. Waller, drawing attention to the latest data on consumer and producer prices, noted that core inflation, which does not take into account the cost of food and energy, in the Fed’s preferred measure has been running below 1.8% over the past four months. In this context, it is worth noting that the target of the central bank of the United States is 2%.
Christopher Waller stated that the mentioned figures indicate the expediency of lowering the cost of borrowing by half a percent.
The consumer and producer price indexes showed an increase of 0.2% for the month. At the same time, the CPI rose by 2.5% in 12 months. Christopher Waller said that the latest data indicate a stronger downward trend. In this context, he stated that against the background of the mentioned information, the central bank of the United States gets even more opportunities for subsequent monetary policy easing. As part of this statement, it was also noted that the US financial regulator shifted its focus to support the labor market, which is softening.
It is worth noting that a week before the Fed meeting, the markets were dominated by the expectation that the central bank of the United States would lower the cost of borrowing by 25 basis points.
Currently, in the US the federal funds rate is in the range of 4.75% to 5%.
