Federal Reserve Coogler: Anti-inflation process may have stalled

The Fed's Mr. Coogler said the latest data showed progress towards the 2 per cent inflation target may have stalled. Given the stability of economic activity and employment, there is support for holding current policy rates on hold as long as upside risks to inflation persist. Inflation expectations are rising and there are upside risks (to inflation) from upcoming policy changes. It is reassuring to note that the increase in long-term inflation expectations has so far been small. Given the recent high inflation, consumer expectations may be more sensitive to further price increases. Labour market indicators point to a sustained slowdown, but not a marked weakening.