Fed's Barr (voter) says inflation has been brought down from 2022 highs to about 3% today, but emphasises the Fed has more work to do to get it down to 2% via continued rate adjustments
- AI impact on labour market so far relatively small.
- Higher US productivity probably not yet from AI.
Context
Fed's Barr indicates that while inflation has decreased from 2022 highs to around 3%, further rate adjustments are necessary to reach the 2% target. This suggests a continued hawkish stance from the Fed, which could impact market expectations for future rate hikes and drive volatility in FX and fixed income as traders adjust their positions based on the Fed's commitment to combat inflation.
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