Federal Reserve Governor Mellan has emphasized the need to ease monetary policy in light of current economic conditions. He stated that the existing tight monetary policy is overly restrictive for the economy and could negatively impact economic activities. Mellan highlighted a positive trend in inflation, particularly noting a slowdown in inflation within the housing sector due to a deceleration in rent increases. He added that a cooling labor market is likely to reduce inflationary pressures in the service sector, which could help improve overall inflation dynamics. Discussing the long-term effects of monetary policy, Mellan noted that the full impact of recent tightening measures has yet to be realized, and therefore, the Federal Reserve should move its policy toward a more moderate, neutral stance as soon as possible. In recent years, the Fed has raised interest rates to control inflation and slow the rapid flow of money in the economy. However, higher rates can affect the payment capacity of businesses and consumers, potentially slowing economic growth. Economists suggest that Mellan’s proposed easing could support the economy, but caution that any adjustments should be made carefully without prematurely dismissing inflation risks. Inflation rates and employment conditions will be closely monitored in the coming months to determine the appropriate extent of monetary policy changes.
Source: binance
