Federal Reserve (Fed) Governor Adriana Kugler said on Wednesday that she believes inflation will continue to fall this year and pave the way for the central bank to cut interest rates, per Reuters

Key quotes

“My policy rate expectation is consistent with March FOMC meeting policymaker projections.”

“If disinflation and labor market conditions proceed as I am currently expecting, then some lowering of the policy rate this year would be appropriate.”

“Expect the disinflationary trend to continue.”

“Policy is currently restrictive, and my baseline expectation is that disinflation will continue without a broad economic slowdown.”

“Such an outcome is not assured.”

“Inflation progress has sometimes been bumpy.”

“Annual core PCE at 2.8% represents 'considerable progress' but is still 'meaningfully above' Fed's 2% target.”

“Data on new tenant rent agreements suggest that housing inflation broadly will continue to cool.”

“Continued disinflation will indeed require further progress in housing and non-housing services.”

“Labor market has moved into better balance.”

“Suspect strong population growth 'helps resolve the puzzle' of labor market growth and strong consumption even as inflation eases.”

“Important that wage growth be consistent with 2% inflation over time; US is moving back toward that kind of wage growth.”

“Anchored inflation expectations are evident in consumer and business surveys.”

“Expect consumption growth to slow some this year.”

“Consumer spending was soft in January and February, suggesting we are on track for lower consumption growth in q1 vs second half of 2023.”

“Expect GDP growth this year to be solid but slower than 2023 pace of 3.1%.”

“My baseline expectation is that further disinflation can be accomplished without a significant rise in unemployment.”

“Appears supply networks are adapting to port of Baltimore disruption.”

“New businesses are creating a lot of new jobs.”

“Around 150,000 jobs a month have come from new businesses