Federal Reserve Governor Quigley: Setting policy must simultaneously focus on inflation and employment goals.

Federal Reserve Governor Lael Brainard stated that policymakers must focus on the central bank's inflation and employment goals simultaneously, and pointed out that the labor market is cooling down, slowing progress towards the Fed's 2% inflation target. Brainard said on Thursday: "The trend of low inflation and cooling labor market continues but at a slower pace, which means we need to continue to focus on both aspects of our mandate." She added: "If there are any risks that hinder economic progress or lead to a new acceleration in inflation, pausing rate cuts would be appropriate. But if the labor market suddenly slows down, continuing to gradually lower policy rates would be the right approach." After a significant half-percentage point cut in borrowing costs in September, the central bank lowered borrowing costs by a quarter-percentage point last week. Given the strong economy, persistent inflation concerns, and general uncertainty, several policymakers this week urged caution in further interest rate cuts. Brainard noted that while wage growth slowdown and stable inflation expectations may further slow price growth, risks in housing and other categories of inflation persist which could hinder further progress. Data released on Wednesday showed core consumer prices (excluding food and energy) rose by 0.3% for the third consecutive month. Overall CPI rose 2.6% from a year ago. Brainard indicated that based on this data, she expects the Fed's most closely watched inflation measure, the Personal Consumption Expenditures Price Index, to rise by 2.3% from a year ago. She anticipates core inflation to rise by 2.8%. Data for October will be released later this month. Independence of the Federal Reserve Brainard's speech focused primarily on the independence of the central bank and its importance in achieving good economic outcomes. She said: "Other economies also believe that transparency is the foundation of monetary policy independence, and people are increasingly recognizing that transparency can lead to better policy decisions that focus on the long-term health of the economy." Her remarks come as questions arise about whether after Trump's reelection he would attempt to limit the Fed's independence. Fed Chair Jerome Powell stated last week that if Trump asks him to resign, he will not resign, insisting that the new president does not have the authority to dismiss him or other senior Fed officials.