Fed Official Warns of Inflation Stalemate as Policy Rate Remains Steady

Federal Reserve official Kugler has raised concerns about the potential stagnation of inflation progress, according to Odaily news. While economic activity and employment remain stable, Kugler believes maintaining the current interest rate is appropriate until inflationary risks are fully mitigated. This stance is fueled by increasing inflation expectations that could influence future policy decisions. However, a limited increase in long-term inflation expectations offers some comfort as consumer price sensitivities may rise with further price hikes. Labor market indicators continue to show a slowdown, but not a significant decline in workforce activity.