Federal Reserve Governor: Underlying inflation is close to target, Fed policy stance is too restrictive

BlockBeats News, December 15, Federal Reserve Governor Milan once again stated that the Fed's policy stance is too restrictive for the economy. He pointed out that the inflation outlook is positive, while some warning signs have appeared in the labor market.

Milan said he expects housing inflation to ease as rent increases return to normal levels from their pandemic peaks. He believes that, due to the cooling labor market, service sector inflation is unlikely to face upward pressure. Some drivers of service sector inflation, such as portfolio management fees, reflect statistical anomalies rather than actual price changes felt by consumers.

Speaking about the labor market, Milan said: "Experience shows that labor market deterioration can happen very quickly, is nonlinear, and is difficult to reverse." "Part of the reason is that monetary policy has a lag effect of several quarters. Therefore, as I have advocated, easing policy more quickly would appropriately bring us closer to a neutral stance." (Golden Ten Data)