Federal Reserve Governor Milan: The Fed's policy stance is too tight, and underlying inflation is close to the target.

Federal Reserve Governor Milan reiterated that the Fed's policy stance is too tight for the economy, noting a healthy inflation outlook while some warning signs have emerged in the labor market. Milan stated that he expects housing inflation to ease as rent increases return to normal levels from their COVID-19 peak. He believes that service sector inflation is unlikely to face upward pressure due to the cooling labor market. Some drivers of service sector inflation, such as portfolio management fees, reflect statistical anomalies rather than actual price changes felt by consumers. Regarding the labor market, Milan said, "Experience shows that labor market deterioration can happen quickly, is non-linear, and is difficult to reverse." "Part of this is due to the lag effect of monetary policy over several quarters; therefore, as I have argued, faster policy easing would appropriately bring us closer to a neutral stance." (Jinshi)