Fed/Kugler: Attention should be paid to the rise in consumers' inflation expectations.

Adriana Kugler, a member of the Federal Reserve Board, stated that the Fed's interest rate policy remains restrictive and well-positioned, but progress in bringing inflation back to the central bank's 2% target has slowed since last summer. She noted that the recent increase in goods inflation seen in the latest data has "not been helpful." Kugler emphasized the need to pay attention to the recent rise in inflation expectations reflected in surveys of American consumers.

Based on the Consumer Price Index and Producer Price Index data released earlier this month, Kugler highlighted that the Personal Consumption Expenditures price index, which the Fed uses to guide its 2% target, is projected to rise to 2.5% year-on-year in February, similar to January. She mentioned, "There is evidence that inflation has accelerated in some subcategories in recent months, which is concerning as goods inflation has shifted back to positive after being negative in 2024."