Fed remains cautious on cuts even as data improves
U.S. Federal Reserve good news on two fronts but policymakers haven't openly shifted views yet about the timing of rate cuts investors are convinced will start this year.
Comments from Fed officials including the vice chair of the rate-setting Federal Open Market Committee, New York Fed President John Williams, acknowledged the positive turn this week when U.S. government agencies reported that consumer prices rose more slowly than expected in April, and that retail spending had not increased at all during the month in a possible sign consumers are pulling back.
But that hasn't yet prompted policymakers to say anything concrete about when rates might fall, indicating as did Fed Chair Jerome Powell earlier in the week that while the baseline outlook remained for inflation to fall, they didn't trust it fully after three months in which inflation data disappointed.
«I don't see any indicators now telling me… there's a reason to change the stance of monetary policy now,» Williams said in an interview with Reuters, adding that he did not expect the case for a rate cut to fall into place «in the very near term.»
In comments on CNBC on Thursday, Richmond Fed President Thomas Barkin said the April retail sales number still means spending was growing at a «good» pace even if not a «great» one, noting that firms particularly in the service sector tell him they continue to plan price increases.
«I do believe we are on the right path. I do believe inflation is coming down,» Barkin said.
But «to get to 2% sustainably it is
