Fed's Kugler: Anti-inflation process may have stalled

The Federal Reserve's Kugler said that the latest data suggest that progress towards the 2 per cent inflation target may have stalled. Given the stability of economic activity and employment, as long as the upside risks to inflation persist, it supports keeping the current policy rate unchanged. Inflation expectations are rising and there are upside risks to upcoming policy changes (to inflation). Pleased that the rise in longer-term inflation expectations has been small so far. Given the recent high inflation, consumer expectations are likely to be more sensitive to further price increases. Labour market indicators point to a continued slowdown, but not a significant weakening.