Federal Reserve Governor Hints at More Interest Rate Hikes – Federal Reserve Governor Michelle Bowman mentioned that further interest rate hikes might be necessary to steer inflation towards the Fed’s target. Additionally, she highlighted her intention to monitor potential signs of reduced consumer spending and weakening labor market conditions.
Speaking at an event organized by the Kansas Bankers Association, Bowman conveyed the possibility of the U.S. central bank needing more interest rate increases to fully establish price stability. She also reiterated her support for the recent rate hike decision taken during the Federal Open Market Committee (FOMC) meeting. In July, the Fed officials elevated the federal funds rate to a range of 5.25% to 5.5%, reaching its highest point in 22 years.
People Also Read: Economist Analyzes Challenges of BRICS Currency Competing With US Dollar
Governor Bowman stated: “Additional rate increases will likely be needed to get inflation on a path down to the FOMC’s 2% target.” “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 detailed.
“I will also be watching for signs of slowing in consumer spending and signs that labor market conditions are loosening,” the Fed governor continued, noting that Fed policymakers will be monitoring incoming data and will be willing to raise interest rates in the future if inflation progress stalls. Following the announcement of the latest rate hike decision, Federal Reserve Chairman Jerome Powell stated on July 26 that the current economic conditions indicate a probable need for an extended period of restrictive monetary policy.
“I would say that what our eyes are telling us is that policy has not been restrictive enough for long enough to have its full desired effects,” Powell stressed, adding: “We intend to keep policy restrictive until we’re confident inflation is coming down sustainably to our 2% target, and we’re prepared to further tighten if that’s appropriate.”
READ MORE
New York Federal Reserve and US Banks Complete Programmable Dollar CBDC Test
SVB Agrees to Sell its Investment Banking Division
IMF Official Presents Blueprint for Cross-Border CBDCs