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US 'strike distance' above Reuters inflation target

US 'strike distance' above Reuters inflation target

© Reuters. Federal Reserve Governor Christopher Waller speaks in San Francisco, California, U.S., March 31, 2023. REUTERS/Ann Saphir/File Photo

WASHINGTON (Reuters) – The United States is “within striking distance” of the Federal Reserve's 2% inflation target, but the central bank should not rush to cut its key interest rate until it is clear that low inflation will last.

Central Bank Governor Christopher Waller said.

Regardless of the timing, Waller said rate cuts should proceed “methodically and cautiously,” not resulting in quick, drastic cuts like the Fed uses when trying to save the economy from a sudden shock or crisis.

“With economic activity and labor markets in good shape and inflation gradually falling to 2%, I see no reason to move as fast or cut as has been the case in the past,” Waller said. Rates at its March meeting and could be cut by 1.5 percentage points from the key rate by the end of the year.

(Translation by Camila Bori, Editing by Andrea Mandala)

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