Thursday, March 28, 2024 | Ramadan 17, 1445 H
broken clouds
weather
OMAN
23°C / 23°C
EDITOR IN CHIEF- ABDULLAH BIN SALIM AL SHUEILI

With inflation low, Fed can boost job market

1371418
1371418
minus
plus

CALIFORNIA: Sluggish inflation gives the Federal Reserve the leeway to keep borrowing costs low and help draw more workers into the labour market, San Francisco Federal Reserve Bank President Mary Daly said. “We’re lucky right now,” Daly said at University of California, Berkeley’s Clausen Center’s conference on global economic issues. “We can keep the policy rate accommodative and we can both find full employment experientially, by waiting for it to show up in wage and price inflation, and we can treat the problem of muted inflation pressures and get ourselves back up to target.”


The Fed last month lowered interest rates for the third time this year, to a range of 1.5 per cent to 1.75 per cent. Fed Chair Jerome Powell has described the rate cuts as an insurance policy against the drag from slowing global growth and geopolitical and trade uncertainty. The rate reductions are also a bid to counter inflation that has remained stubbornly below the Fed’s 2 per cent goal. Meanwhile the US economy continues to grow modestly and unemployment, at 3.6 per cent, is near lows set decades ago.


Powell has said the Fed is likely to leave rates where they are barring any “material” change in the economic outlook.


Daly on Saturday did not speak directly about the Fed’s recent rate cuts. But, she said, there is little evidence that low rates are creating costly imbalances in financial markets, a worry voiced by some Fed policymakers who have opposed the rate cuts.


Financial conditions, she said, are generally stable, citing a Fed report.


Nor, Daly said, does it appear that the labour market is harming longer-run economic potential by encouraging young people to curtail their education, and future career prospects, in order to take a job, she said. — Reuters


SHARE ARTICLE
arrow up
home icon