Fed’s Barr: Important to ask how long to hold onto tightening policy

Michael Barr, Vice Chair for Supervision of the Federal Reserve, stated on Monday that the central bank should implement monetary policy cautiously.

The most important question, in his opinion, is not how much higher interest rates will rise, but rather how long they will stay at a level that is appropriately restrictive.

According to Barr, the labour market is constrained but is gradually striking a better balance between the supply and demand for workers.

Regarding the future for the economy, Barr expressed confidence that the Fed can manage inflation without materially worsening the labour market.

The US Dollar Index is up 0.60% and is currently trading at 106.80. It is on track to close at its best level since November.