On Friday (18), the President of the Federal Reserve (the Federal Reserve, the US Central Bank) said on Friday (18) that there is room to reduce interest in the United States this year, but the process must occur at a gradual pace to achieve the balance of inflation and the scope of the “appropriate neutral level”.
For Daly, this level ranges from 1 % and 2 %, and perhaps closer to the lowest level in this range.
The leader said that sales in American retail also shows that the American economy is strong and “at a fun time.”
“The uncertainty about the new policies has not yet interrupted the consumption and business operations, they have only slowed some sectors of the economy,” he said.
Daly believes that the United States BC does not need to be in a hurry to control monetary policy and may be patient to analyze the effects of the unconfirmed environment on the economy, to see if it will be really a great weight of economic growth and long -term inflation expectations.
According to her, interest rates in a “good position” remain a restriction to control and decline.
The leader also explained that when he thinks about the position he calls the data on which the United States relies on BC, he considers all available information, including companies’ opinion about the state of the economy.
Dali acknowledged the increase in the short -term inflation expectations, as it is recently evident through the Federal Reserve Reserve in New York and the University of Michigan, but has attributed changes to consumer sensitivity to energy prices and food prices.
“Expectations continue in the middle and long term,” he said.
Comments were made during a discussion committee at Berkeley University. Daly does not vote to make decisions of the Federal Open Market Committee (FOMC) this year.
A moment of cutting
San Francisco Federal Reserve Chairman has admitted that further cuts in interest rates can be made in the United States today, if there is a deterioration in the labor market or a sharp decline in inflation in the United States.
In its last plan, it was released in March, the Federal Reserve expected an average discount of 0.25 percentage points this year.
However, this is not the Dali base scenario. He warned, “The American economy walks where we would like, but the risk of high inflation grows.” “A reaction depends on the progress that we will get in inflation.”
The leader emphasized that the occasion will be a gradual process to reduce interest since the end of this year, to avoid pressure on the economy too much if inflation remains close to 2 % and the economy in good performance.
He recalls, “We have only one promise, which is a guarantee of price stability,” he recalls. “The existence of a critical policy is now restricted to controlling inflation does not mean that this will be forever.”
Dali stressed that the scope, size and timing of balance in global trade resulting from the Trump government’s tariff and its effects will eventually play an important role in this decision.
Definitions
The President of the Federal Reserve in San Francisco indicated that the fluctuation of global financial markets was expected and occurred in an “organized” way, which reflects only an attempt for investors “to adapt to all modern changes” in American policies.
“We are witnessing the wide re -negotiation of trade around the world, which can change the flows and the way people invest,” she said at the Berkeley University Discussion Committee.
“When we know where the new policies will stop, it will be easier to calculate the effect. This cannot do with certainty.”
In addition to commercial policies, Dali commented on other measures developed by the Trump government. In the case of migration, the leader indicated that there was no immediate impact on the labor market.
He said: “Unemployment, wages and employment rates have not changed. Participation and productivity rates have already increased, which is positive.”
Fiscal policy
On fiscal policy, Dali recalled that this field is completely separated from the monetary policy in America BC.
“What I can say is that the impact of changes on tax dynamics depends on the ability of the American economy to absorb it,” he said, adding that the Federal Reserve is still working to contain high inflation and the narrow labor market in the country.
The leader noted that she had received comments with positive expectations for a tax reduction package, canceling restrictions and reducing the financial deficit promised by President Donald Trump, in the hope that measures would be able to increase American economic growth.
“There are only some uncertainties and questions about when to cancel the restrictions and what will be its scope,” he said.
The public budget for the Federal Reserve Reserve
About the full budget of the full moon, Dali said there is still room to reduce reserves until they reach their “wide level.”
The commander pointed out that the American BC “looks at the long term”, not short fluctuations by managing their monetary policy tools.
