Fed Focuses on Inflation and Employment Goals Amid Cooling Labor Market

Federal Reserve Governor Coogler stated that policymakers should focus on the central bank’s goals of controlling inflation and employment. The labor market is slowing, and the 2% inflation target is progressing slowly. Kugler said the Fed must continue to work on both fronts. If there are any risks of slowing progress or re-inflation, the Fed should consider raising interest rates.

However, if the labor market slows suddenly, interest rates should be lowered gradually. Slower wage growth and stable inflation expectations may help reduce price growth further, but strong inflation in housing and other sectors could hinder progress.

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