The Fed: Fed’s Barr says slowing pace of interest-rate hikes ‘makes sense’

by | Dec 1, 2022 | Stock Market

The Federal Reserve should downshift the pace of its rate hikes in December, said Federal Reserve Vice Chairman for Supervision Michael Barr on Thursday. The Fed has pushed up rates with four straight 0.75-percentage-point moves since June. Asked if he supported stepping down from that historically large 0.75-percentage-point hike to a 0.50-percentage-point hike, Barr replied: “I think it makes a lot of sense.”

“We’ve been moving very very rapidly into restrictive territory and now that we’re closer to where we may need to be in terms of being sufficiently restrictive, I think it makes sense to slow the pace at which we’re increasing rates,” Barr said. Also read: Fed banking supervisor eyes ‘holistic’ review of bank regulations while doubling down on protections they offer The Fed vice chairman said it was a mistake to interpret a decision to slow the pace of rate increases “as reflecting a change in the seriousness of the project at hand.” Barr said he was committed to bringing inflation back down to 2%: “We have a lot of work to do. We have a long way to go.” Barr said the Fed will have to keep rates at a sufficiently restrictive territory “for a long period of time” to bring inflation back down to 2%. Stocks

closed lower on Thursday, while the yield on the 10-year Treasury note

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