The U.S. Federal Reserve is unlikely to rush into changing interest rates as inflation continues to moderate and economic conditions remain balanced, according to Steve Englander from Standard Chartered Bank. Speaking to ET Now, he said the combination of strong productivity growth, easing oil prices, and subdued labour cost pressures has reduced the urgency for policy action. In his view, there are no significant imbalances in either economic activity or inflation that warrant an immediate move, allowing the Fed to monitor how structural forces shape the inflation outlook.
“Our forecast was that they would be flat in 2026... unit labour costs, which are the biggest driver of domestic price pressures, are very, very muted... With oil prices coming down... inflation risk is lower. They really do not have to do much,” he said.
