St. Louis Federal Reserve Bank President James Bullard said on Friday (18th) that he believes the Federal Reserve (Fed) should raise the federal funds rate from 0% to more than 3% this year, equivalent to 12 rate hikes , to demonstrate to the public its determination to fight inflation.
Bullard was the only one to vote once morest a rate hike at this week’s FOMC meeting, arguing for a 0.5 percentage point hike, and in a statement on Friday said he hoped the Fed would raise the benchmark rate. From 0% to more than 3%, he said that inflation was hurting the bottom of the economy and that interest rates should be adjusted to a level more suitable for current conditions.
“Excessive inflation is particularly burdensome for those with moderately well-off incomes and wealth, and for those with limited affordability from rising living costs,” Bullard said. “The combination of strong economic performance and unexpectedly high inflation means that The FOMC’s current policy rate is too low to prudently manage the U.S. macroeconomic situation.”
At the same time, Bullard also pointed out that the Fed had taken aggressive interest rate hikes in 1994-95 in response to economic recovery and rising inflation, and believed that the current environment should take similar actions.
10 FOMC members expect the benchmark interest rate to be 1.75% to 2% by the end of the year, but 8 members think it should be higher. It’s Brad’s.
A few days ago, the FOMC raised its benchmark interest rate by 0.25 percentage points following a two-day meeting, the first rate hike in nearly three years. At the same time, economic forecasts show that the remaining monetary policy meetings this year will raise interest rates by 0.25 percentage points each time. , which will bring the benchmark interest rate to a range of 1.75% to 2% by the end of the year.
