St. Louis Fed President Kathleen O’Neill Paese emphasized the current effectiveness of monetary policy in exerting “modest downward pressure on inflation.”
“We can afford to await further data before concluding that additional policy tightening is appropriate,” Paese stated.
Despite this cautious approach, she warned against complacency, asserting that prompt action must be taken if the downward trend in inflation shows signs of stalling.
“However, if progress toward achieving 2% inflation stalls, I believe that the committee should act promptly to ensure that high inflation does not become entrenched,” she noted.
Paese also reminded that the high-interest-rate environment is expected to persist as part of the long-term strategy to rein in inflation.
