Fed’s Kugler backs more rate cuts as focus shifts to employment

Fed Governor Adriana Kugler expressed “strong” support for last week’s 50bps rate cut, signaling her inclination toward “additional cuts” in the federal funds rate.

In her speech overnight, Kugler emphasized that while the focus remains on bringing inflation down to the 2% target, attention should now begin to “shift attention to the maximum-employment side” Fed’s dual mandate.

The labor market “remains resilient,” she noted, but stressed that FOMC must now carefully balance its objectives. Fed should aim to maintain progress on disinflation while avoiding “unnecessary pain and weakness” in the broader economy.

Full speech of Fed’s Kugler here.