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Federal Reserve Watch for Feb. 4: Fed Officials Urge Caution Amidst Uncertainty, See Upside Inflation Risks From Tariffs
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Federal Reserve Watch for Feb. 4: Fed Officials Urge Caution Amidst Uncertainty, See Upside Inflation Risks From Tariffs
Feb 4, 2025 11:53 AM

02:24 PM EST, 02/04/2025 (MT Newswires) -- San Francisco Fed President Mary Daly (nonvoter) said that the Federal Open Market Committee can take its time making policy decisions this year, noting that it does not have to be preemptive and can make good decisions based on the incoming data.

Boston Fed President Susan Collins (voter) said that proposed tariffs could have an upward effect on inflation while Chicago Fed President Austan Goolsbee (voter) repeated comments from other Fed officials that the FOMC will need to proceed cautiously when considering rate reductions due to the uncertainty.

Recent comments of note:

(Feb. 3) Atlanta Fed President Raphael Bostic (nonvoter) said that he believes that a "wait and see" approach to policymaking will be appropriate this year due to uncertainty in the outlook, adding that he is willing to wait for clarity before lowing rates.

(Jan. 31) Fed Governor Michelle Bowman (voter) repeated that she favors a "cautious and gradual" approach to monetary policy adjustments going forward, noting that inflation remains elevated and that the current stance of policy appears to not be exerting real restraint on the economy.

(Jan. 29) The FOMC maintained the range of its policy rate at 4.25% to 4.50% at the meeting, as widely expected. The FOMC made small changes to its statement that showed inflation remains elevated while removing an acknowledgment of progress, while at the same time saying that labor market conditions are solid rather than easing and that the unemployment rate has stabilized at a low rate.

(Jan. 29) Fed Chairman Jerome Powell (voter) said the FOMC does need to hurry to lower rates given the strength in the labor market and the heightened rate of inflation. Powell would not comment on US President Donald Trump's demand for lower interest rates.

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