WASHINGTON, Dec. 3 (Xinhua) — U.S. inflation is on the path to meet the Federal Reserve’s goal of 2 percent, but the job is “not yet done,” a U.S. Fed official said on Tuesday.
Overall personal consumption expenditures (PCE) prices rose 2.3 percent over the 12 months ending in October, and core PCE price index, which strips out volatile food and energy prices, increased 2.8 percent, inflation readings released last week showed.
“I am encouraged that inflation expectations appear to remain well anchored,” Adriana D. Kugler, a Fed governor and a member of the policy-setting Federal Open Market Committee (FOMC), said in a speech at the Detroit Economic Club in Detroit.
However, the job is not yet done, she said, adding that the inflation of housing services, in particular, remains elevated.
Inflation “may be stalling at a level meaningfully above 2 percent,” though “this is a risk but not a certainty,” Christopher Waller, another Fed governor and a member of the FOMC, said in a speech in Washington, D.C. on Monday.
He leaned toward supporting a cut to the policy rate at the Fed’s meeting in December, based on the economic data and forecasts that inflation would continue its downward trend, he added.
The central bank cut the target range for the federal funds rate by 50 basis points and 25 basis points in mid-September and earlier November respectively.
The Chicago Mercantile Exchange (CME) Group’s FedWatch Tool, which acts as a barometer for the market’s expectation of the Fed funds target rate, showed that as of Tuesday evening, the market expects a 72.9-percent probability that the Fed would cut interest rates by 25 basis points at the next meeting in December.
