영한_거시경제_김지유

[19기 김지유]

Reflections on the Economy and Bank Regulation By Governor Michelle W. Bowman

At the New Jersey Bankers Association Annual Economic Leadership Forum, Somerset, New Jersey (3.7.2024)

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다음 글은 2024  경제 리더십 포럼에서 미셸 보우먼 미국 연방준비제도(Fed·연준)의 연설 일부분(통화정책 내용 위주)을 편집한 연설문입니다. 숫자가 앞부분에 있는 편입니다.

<Glossary>

1. Federal Reserve

2. FOMC

3. core PCE

4. federal funds rate target range 연방 기금 금리 목표

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Thank you for the invitation to share my thoughts today. While I appreciate the opportunity to discuss monetary policy, the economy, and regulatory reform, I also value hearing your views on local banking and economic conditions. These insights inform my work at the Federal Reserve, helping me understand the economy and banking environment better.

Over the past two years, the FOMC has significantly tightened monetary policy to address high inflation. In our most recent meeting, we decided to maintain the federal funds rate target range at 5.25% to 5.50% and continue reducing the Federal Reserve's securities holdings.

We've seen progress on inflation, with 12-month readings through January showing total and core PCE inflation down to 2.4 percent and 2.8 percent, respectively—the lowest rates since early 2021. However, the January data suggest that further progress may be slower. Despite inflation declines, economic activity remains strong, especially in consumer spending. Signs of the labor market coming into balance were seen, but recent strong jobs reports indicate continued tightness. Last year, job growth slowed, and the labor force participation rate rose with unemployment edging up to 3.7 percent. Recently, job growth rebounded, and labor force participation declined slightly.

Our current monetary policy stance is restrictive and seems appropriately calibrated to reduce inflationary pressures. My baseline outlook is that inflation will decline further with the policy rate held steady. However, there are several upside risks to this outlook. These include geopolitical developments, which may affect food and energy markets and supply chains, as well as risks from potential financial conditions loosening and additional fiscal stimulus. Persistent labor market tightness could also lead to sustained high core services inflation, with some businesses continuing to report above-average wage increases due to elevated prices and high inflation.

Given these risks and general economic uncertainty, I will closely monitor data to assess the appropriate path for monetary policy. The frequent and significant data revisions, such as those in the recent employment report, make it challenging to assess the economy's current state and future trajectory. I will remain cautious in considering changes to policy. Should data indicate that inflation is moving sustainably towards our 2 percent goal, it may become appropriate to gradually lower the policy rate to avoid overly restrictive monetary policy. However, we are not yet at that point, and reducing rates too soon could necessitate future increases to return inflation to 2 percent over the long term.

It is important to note that monetary policy is not on a preset course. My colleagues and I will make our decisions at each FOMC meeting based on the incoming data and the implications for the outlook. While the current stance of monetary policy appears to be at a restrictive level that will bring inflation down to 2 percent over time, I remain willing to raise the federal funds rate at a future meeting should the incoming data indicate that progress on inflation has stalled or reversed. Restoring price stability is essential for achieving maximum employment and stable prices over the longer run.

(505 words)