The Federal Reserve will possible want to lift rates of interest even increased to convey inflation right down to tolerable ranges, Fed Gov. Michelle Bowman mentioned Saturday.
Speaking at a gathering of the Kansas Bankers Association in Colorado, Bowman — a former Kansas banking regulator — mentioned she expects “that additional rate increases will likely be needed to get inflation on a path down to the [Federal Open Market Committee]’s 2% target.”
Last month, the Fed raised its benchmark rate of interest to a spread of 5.25% to five.5%, the best the Fed goal price has been since 2001.
Bowman mentioned she supported that hike, which got here after a pause in June, and that she needs to see extra indicators that the latest drop in inflation is sustained.
“The recent lower inflation reading was positive, but I will be looking for consistent evidence that inflation is on a meaningful path down toward our 2% goal as I consider further rate increases and how long the federal funds rate will need to remain at a restrictive level,” she mentioned, based on a transcript of her ready remarks.
Bowman reiterated that “monetary policy is not on a preset course,” and mentioned upcoming selections can be pushed by knowledge.
“We should remain willing to raise the federal funds rate at a future meeting if the incoming data indicate that progress on inflation has stalled,” Bowman mentioned. “Returning inflation to our 2% goal is necessary to achieve a sustainably strong labor market and economy.”
In June, the Fed forecast two extra price hikes earlier than 12 months’s finish, however Chair Jerome Powell has refused to say whether or not what many count on to be the ultimate hike on this price cycle will are available September.
Source web site: www.marketwatch.com
