Q&A Feds Kugler: Disinflation was rapid in the second half of 2023

Question and answer with Kugler has begun. She says: This inflation was rapid in the second half of 2023Inflation on 3-6 month basis as moved to 2% levelWage growth moderation is keyServices ex-housing is one of the elements to be watched for continued declinesHousing inflation has been persistent but is expected to come downLayoffs in US are spotty and not showing up in aggregate dataImmigration is helped in some sectors including constructionWe need further moderation in wage data especially the service sector, but it is moderating and this filtering through to pricesWage moderation needs to continue, though level that is consistent with inflation target depends on factors like productivityToo early to assess AI's potential on productivityProgress on inflation has been aided by both Fed policy impact on demand and healing of the supply-side. There is still room for healing on the supply-side help lower inflation.20% of companies are still seeing shortage of goods suppliesThere is much uncertainty around the neutral rate of interest.At the policy interest rate will depend on performance of inflationAware that unemployment rate can move fast when it starts to changeWatching commercial real estate for source of financial stress.Keeping a close eye on regional bank exposureMay be some upward pressure coming on goods prices given global shipping, other riskEvery meeting is 'live' from here and moving forward. This article was written by Greg Michalowski at www.forexlive.com.