By Ann Saphir
(Reuters) -Two Federal Reserve policymakers said on Saturday they feel the U.S. central bank’s job to control inflation is not over yet, but they also don’t want to risk damaging the labor market in the process.
The comments, from Gov. Adriana Kugler and San Francisco Federal Reserve President Mary Daly, highlight the delicate balancing act the U.S. central bank faces this year after cutting short-term rates by one percentage point. complete last year.
Fed policymakers signaled in December that they hoped to cut rates more slowly this year to reduce inflation, which hit 2.4% in November, to the Fed’s 2% target.
“We are fully aware that we are not there yet: Nobody is popping champagne corks anywhere,” Kugler said at the American Economic Association’s annual conference in San Francisco. “And at the same time … we want the unemployment rate to stay where it is” and not increase rapidly. In November, unemployment was 4.2%.
“At this point, I wouldn’t like to see a further slowdown in the labor market, perhaps gradually moving to bumps in a given month, but certainly not a further slowdown in the labor market,” said Daly, who spoke on the same panel.