2023-08-05 17:31:40
Michelle Bowman, one of the governors of the Federal Reserve, anticipates additional rate hikes to bring down inflation in the United States.
An official of the American central bank (Fed) ruled on Saturday that additional rate hikes would certainly prove necessarys to further lower inflation in the United States, following already 11 hikes since March 2022.
“I expect (…) that additional rate increases will probably be necessary to bring inflation back to the 2% target” that the Fed is targeting, said Michelle Bowman, one of the institution’s governors, during a speech in Colorado Springs (Colorado).
“I expect (…) additional rate hikes will likely be needed to bring inflation back to the 2% target.”
“The recent drop in inflation was positive,” she said. Inflation, in fact, fell to 3.0% over one year in June, both for the PCE index, favored by the Fed, and for the CPI, which is the benchmark.
“We should remain open to raising the fed funds rate at a future meeting if the data indicates that progress on inflation has stalled,” Bowman said.
She clarified that she would also be watching “signs of slowing consumer spending and signs of easing labor market conditions“, which will show whether economic activity is slowing down, a necessary condition for the pressure on prices to be relieved in the long term.
Another story in Chicago
Another Fed official, Austan Goolsbeepresident of the Chicago branch, who this year has rotating voting rights at meetings, had for his part raised the possibility of a new break.
If the economic data to be released by the September 19-20 meeting shows that inflation continues to ease and economic activity and employment remain strong, “I think everyone will be comfortable to stay where we are,” he said.
The unemployment rate fell to 3.5% in July, but job creations were fewer than expected, and those of the previous two months revised downwards.
The Fed last week raised rates for the 11th time since March 2022, following a pause at its previous meeting in mid-June. Its main key rate is now in a range of 5.25 to 5.50%.
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