Concerns raised by Federal Reserve Governor about uptick in goods inflation, impacting total inflation and expectations.

From Yahoo Finance: 2025-03-25 08:44:00

Federal Reserve Governor Adriana Kugler expressed concerns about slowing progress in bringing inflation back to the 2% target, citing an uptick in goods inflation as “unhelpful.” Recent data shows the Personal Consumption Expenditures price index climbed at a 2.5% pace year-over-year in February. Surveys indicate a surge in inflation expectations.

Kugler highlighted the impact of goods inflation turning positive in recent months, affecting total inflation and expectations. The University of Michigan’s Consumer Sentiment Index showed increased inflation expectations due to the Trump administration’s tariff plans. Kugler is closely monitoring price increases and inflation expectations, noting recent bouts of inflation.

Despite softening retail sales, the labor market has remained stable through February according to Kugler. The Fed’s interest rate policy remains restrictive and well-positioned, with concerns over inflation trends. Kugler’s term on the Fed Board of Governors is set to expire next year.

Read more: Uptick in goods inflation ‘unhelpful’