2023-06-22 14:21:44
(Washington) A governor of the US Federal Reserve (Fed) said Thursday that “additional rate hikes will be necessary” to curb inflation that is still very high, following a marked pause last week in these increases.
Posted at 10:21 a.m.
“I believe additional rate hikes will be needed to bring inflation back to our target” of 2%, Michelle Bowman told a conference hosted by the Fed’s Cleveland regional office.
However, she said she “supported” the Fed’s decision on June 14 to leave rates in their 5.00-5.25% range, marking a break for the first time since March 2022, following 10 hikes of in a row.
“Although monetary policy tightening has had some effect on economic activity and inflation to date, we have seen core inflation (excluding food and energy) stagnate since the fall of 2022. “, noted the governor.
“I expect that we will have to raise the rate further in order to achieve a sufficiently tight monetary policy position to bring inflation down significantly and sustainably,” she said.
Ms. Bowman, however, did not specify how far she considers it necessary to raise the key rate.
Fed Chairman Jerome Powell, who was heard by a House of Representatives committee on Wednesday, also warned that rates would certainly resume their ascent.
“Given how far we’ve come, it may make sense to raise rates, but do so at a more moderate pace,” he said.
“Almost all” Fed officials “expect it to be appropriate to raise interest rates somewhat further by the end of the year,” Mr. Powell had further indicated. With “a large majority” in favor of two increases.
Mr. Powell continues his semi-annual hearing before Congress on Thursday, and will be heard by a Senate committee.
The next Fed meeting will be July 25-26.
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