Atlanta Fed's Venable: U.S. inflation remains too high

Inflation in the United States remains too high, Atlanta Federal Reserve President Michael Venable said on Thursday, underscoring the central bank’s cautious stance on monetary policy.

Speaking at an event hosted by the Atlanta Fed, Venable noted that while inflation has eased from its 2022 peaks, underlying price pressures continue to exceed the central bank’s 2% target. He highlighted services inflation, particularly in labor-intensive sectors, as a key concern, warning that further progress toward price stability would require sustained policy restraint.

Venable’s remarks align with recent remarks from other Fed officials, who have emphasized the need for patience in assessing whether inflation is sustainably returning to target. The Fed has held its benchmark interest rate steady at a 23-year high since July 2023, awaiting clearer evidence of durable disinflation before considering rate cuts.

The Atlanta Fed president’s comments follow the release of softer-than-expected consumer inflation data for June, which showed a moderation in headline and core inflation. However, Venable cautioned against overinterpreting a single month’s data, stressing that a broader trend of deceleration is necessary to justify policy adjustments.

Market expectations for a September rate cut have fluctuated in recent weeks, reflecting uncertainty over the timing of the Fed’s pivot. Futures pricing indicates a roughly 70% probability of a rate reduction by the Federal Open Market Committee’s September meeting, according to CME Group data.

Venable did not provide specific guidance on the timing or magnitude of potential rate adjustments, reiterating that decisions will be data-dependent. His remarks reinforce the Fed’s data-driven approach to balancing inflation risks with economic growth concerns.