Gregory Daco: FOMC may tighten monetary policy if core inflation rises again

Gregory Daco: FOMC may tighten monetary policy if core inflation rises again
FOMC could tighten if inflation rises

Gregory Daco highlights that if there is another strong reading on core inflation this week, the Federal Open Market Committee (FOMC) will need to consider tightening monetary policy in the near term.

This comment reflects ongoing concerns about persistent inflation pressures and the possibility of a policy response if inflation does not ease.

Daco previously noted that AI-driven demand is a main factor impacting U.S. inflation and could trigger rate hikes, according to a recent post by New York Fed President John Williams covered here. He also reported on the Fed's creation of five specialized task forces focused on communications, its balance sheet, data, productivity, jobs, and inflation earlier this year. Both developments signal a continued focus on inflation risk and policy planning.

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