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    Fed Members Optimistic on Inflation Fight, Want More Data Before Deciding on Rate Cuts

    Several Federal Reserve officials struck an optimistic tone Tuesday in the country’s protracted struggle to get a handle on inflation but warned against easing the current restrictive monetary policy too soon for fear of jeopardizing hard-won economic progress.

    Federal Reserve Governor Adriana Kugler, Federal Reserve Bank of Richmond President Thomas Barkin, and Boston Federal Reserve President Susan Collins all expressed similar reservations over hastily lowering the benchmark interest rate of 5.25% to 5.5% and said more data was needed to convincingly demonstrate the U.S. was beating back inflation for good.

    Kugler, Collins, and Barkin made the remarks at separate events Tuesday. They were among the six Federal Reserve officials scheduled to speak throughout the day.

    On Monday, Philadelphia Federal Reserve President Patrick Harker appeared to provide the CliffsNotes for his colleagues’ later remarks, cautioning in a speech that there was still too much uncertainty about where inflation is heading, yet indicating that at least one reduction would be “appropriate” if the economic data stays largely the same. Traders are betting the U.S. central bank will make at least one rate reduction this year, likely by September.

    Gold and silver were both trading in positive territory Tuesday afternoon, with the yellow metal up $9.46 at $2,330 per ounce. Silver, which had been flirting all morning with breaking into the black, was up $0.03 to trade at $29.54 per ounce.

    “As I stand here today, inflation remains too high, but I am encouraged by the overall progress and trajectory,” said Kugler, according to a transcript of her speech at the Peterson Institute for International Economics posted by the Federal Reserve. “Recent data on the economy and inflation also give me cautious optimism that we are on track and making continued headway toward the Federal Open Market Committee’s inflation goal of 2%.”

    Yet even with the recent string of positive economic data, “we should not overreact to a month or two of promising news, just as it was not appropriate to take too much (of a) signal from the disappointing data at the beginning of this year,” Boston Federal Reserve President Susan Collins said in a speech to a group in Lawrence, Massachusetts.

    While also noting economic progress due to restrictive monetary policy and improving supply chains, Barkin said in an interview that inflation was still noticeable in areas like the housing market.

    “We’re clearly on the backside of inflation,” Barkin said. “But the question is, ‘Are we all the way back?’”

    While Barkin and Kugler are both voting members of the FOMC, Collins doesn’t hold a voting role.

    Disclaimer: All Market Updates are provided as a third party analysis and do not necessarily reflect the explicit views of JM Bullion Inc. and should not be construed as financial advice.

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