HomeFinancial MarketsFederal Reserve Governor Suggests More Rate Hikes May Be Needed

Federal Reserve Governor Suggests More Rate Hikes May Be Needed

Federal Reserve Governor Michelle Bowman stated during the Kansas Bankers Association in Colorado that further interest rate hikes may be necessary in order to bring inflation in line with the Fed’s 2% target. She added that supported the notion to raise rates further at the Fed’s meeting last month.

“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,” Bowman explained. “I will also be watching for signs of slowing in consumer spending and signs that labor market conditions are loosening.”

In July, the Fed rose interest rates to a range of 5.25% to 5.5%; the highest level in 22 years. According to the most recent Fed officials’ quarterly projections, two more rate increases were implemented this year, which includes last month’s rise.

Chicago Fed President Austan Goolsbee echoed Bowman’s sentiment, explaining that policymakers will need to express patience in the disinflation process as they continue to cool inflation in an effort to reach the 2% target.

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