Fed Governor Adriana Kugler said overnight that it’s “appropriate to hold the federal funds rate in place for some time”, citing the current balance of risks in the economy.
Kugler acknowledged that inflation still has “some way to go” before reaching 2% target. She highlighted that while the labor market remains strong and risks of a downturn have eased, “upside risks to inflation remain.”
Regarding the potential impact of new tariffs, Kugler stated that while they could contribute to higher prices, the extent of their effect remains uncertain. She emphasized that policymakers will need to “wait” for more data to assess how trade policy shifts might influence inflation and broader economic conditions.
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