Evidence in favor of a 'soft landing' for the U.S. economy, in which inflation declines without major job losses, appears to be growing, Federal Reserve Vice Chair Lael Brainard said on Thursday in remarks that excluded any explicit policy preference for the U.S. central bank's upcoming meeting but noted signs of slowing growth.
Federal Reserve Vice Chair Lael Brainard speaks at the University of Chicago Booth School of Business, in Chicago, Illinois, U.S., January 19, 2023. REUTERS/Bianca FlowersWASHINGTON, Jan 19 - Evidence in favor of a "soft landing" for the U.S. economy, in which inflation declines without major job losses, appears to be growing, Federal Reserve Vice Chair Lael Brainard said on Thursday in remarks that excluded any explicit policy preference for the U.S.
In addition, she said the full impact of last year's aggressive Fed interest rate increases has yet to be felt. The U.S. central bank raised its benchmark overnight interest rate by 4.25 percentage points in 2022 to the current 4.25%-4.50% range to fight inflation that climbed to 40-year highs. At the same time, Brainard pointed to trends in prices, wages and margins that indicated inflation, which by the Fed's preferred measure is running at almost three times its 2% target, was slowing and could well continue doing so."It remains possible that a continued moderation in aggregate demand could facilitate continued easing in the labor market and reduction in inflation without a significant loss of employment," Brainard said.
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