US monetary policy: Fed’s official sees no urgency for further rate cuts, flags distorted inflation data
Speaking to CNBC on Friday, New York Federal Reserve President John Williams said inflation readings for recent months were likely affected because government agencies were unable to collect price data in October and the first half of November amid the record-long shutdown.“Because of that, I think the data were distorted in some of the categories, and that pushed down the consumer price index reading probably by a tenth or so,” Williams said, adding that it was difficult to precisely quantify the impact.He said inflation data for December could provide a clearer picture of the extent of the distortion.Williams’ remarks followed the release of a delayed US consumer price index report earlier this week, which showed inflation easing to 2.7 per cent in November from 3 per cent in September.
Several economists had warned that the figures may not fully reflect underlying price pressures.Some analysts pointed out that a higher share of price quotes may have been collected during the Black Friday discount period, potentially biasing the data downward — a concern Williams echoed.Asked how the latest data influenced his outlook on interest rates, Williams said the Fed’s policy stance was appropriate for now.“I don’t personally have a sense of urgency to need to act further on monetary policy right now,” he said, adding that the rate cuts already delivered had positioned policymakers well.The Federal Reserve has cut interest rates three times this year as the labour market weakened, but has signalled a higher threshold for additional easing.
The central bank’s next policy meeting is scheduled for late January.
