Kansas City Fed President Esther George hinted that the economy is currently at the point where the Fed can start easing off the monetary policy.
George didn’t mention a specific date for when she thinks that process will begin, but she indicated that it would be coming soon.
George said, “ I think it is appropriate given the progress we’ve seen. It doesn’t mean that we will move all the way to a neutral or tighter policy, but I think it’s the first step. Signs in the economy right now are showing that we’re reaching that point.”
Officials have fixed the standard of “substantial further progress” as the point where they will consider tightening central bank policy that includes benchmark interest rates being held near zero.
George expressed that the progress in the jobs and the sustained run higher of inflation gives a sign for her that the central bank can start to back off the crisis time measures it has taken.
Implementing the easiest monetary policy in history was challenging for the central bank, so coming out of that will also be difficult. Currently, growth is slowing, and the central bank is trying to exit.
Investors are eager to hear from what central bank Chairman Powell thinks about the overall economy and its monetary policy.
