Since last year, the Federal Reserve has raised its key interest rates ten times in an effort to dampen demand and reduce inflation, which is still well above its target rate of 2%.
However, despite these drastic measures, the unemployment rate is still close to its lowest levels in history, indicating that employment has not yet been significantly affected by the tightening of credit conditions.
At a seminar in Minnesota, Neel Kashkari, a member of the Federal Reserve’s rate-setting committee, said, “The labor market remains strong.
He pointed out that this case indicates that “we have a long way to go before we reduce inflation to the two percent level that we want, and we at the Federal Reserve will probably have to make a greater effort to reduce inflation. ‘inflation’, according to Kashkari. .
Since the Federal Reserve’s last decision to raise policy rates this month, policymakers’ views have diverged on whether to halt the upward interest rate spiral in the face of a slowing US economy. United.
Kashkari’s statements put him in the category of members of the Federal Reserve’s rate-setting committee who support raising those rates for the 11th time at the next meeting scheduled for June 13-14.
“We shouldn’t be fooled by a few months of positive data,” Kashkari said.
He noted that the inflation rate is still well above the 2% target, adding, “We have to get the job done.”
On Monday, another member of the Fed’s rate-setting committee expressed support for taking a data-driven approach in the upcoming rate decision.
Federal Reserve Chicago Branch Chairman Austan Goolsby said the Fed should take a “sit and watch” approach, stressing that the full effects of the rate hikes had yet to be felt.
“At times like this, you don’t want to land the plane with the nose down,” he said, referring to a risky landing.
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