- James Bullard, St. Louis Fed President
The Fed policy makers remain divided on future interest rate hikes. Jeffrey Lacker, Richmond Fed President, said that the US central bank still has room to lift rates further in the coming months, as there are no signs that recession is imminent. Even though inflation remains below the Fed's 2% target, inflation indicators suggest a possible move back toward the goal over the medium term, Lacker said. The official added that economic analysis indicates that inflation could average 1.9% in the period between 5 years to 10 years from now. Yet, Lacker is not a voting member this year. Moreover, the new head of Minneapolis Fed, Neel Kashkari, said that he is optimistic about the US economy, which continues to grow moderately as the year progresses, adding that he sees both upside and downside risks to the growth outlook. Meanwhile, Robert Kaplan, Dallas Fed President, said that he does not expect the US economy to enter recession this year. Kaplan is among Fed officials advocating a patient and cautious approach to policy normalization given the global headwinds.
At the same time, St. Louise Fed President, James Bullard, reiterated his opposition to further interest rate increases amid a decline in US inflation expectations, which threatens the Fed's credibility. Investors are now expecting a price measure of less than 1.5%
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