The Federal Reserve will likely need to raise interest rates even higher to bring inflation down to tolerable levels, Fed Gov. Michelle Bowman said Saturday. Speaking at a meeting of the Kansas Bankers Association in Colorado, Bowman — a former Kansas banking regulator — said 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 interest rate to a range of 5.25% to 5.5%, the highest the Fed target rate has been since 2001. Bowman said she supported that hike, which came after a pause in June, and that she wants to see more signs that the recent 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 said, according to a transcript of her prepared remarks. Bowman reiterated that “monetary policy is not on a preset course,” and said upcoming decisions will be driven by data. “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 said. “Returning inflation to our 2% goal is necessary to achieve a sustainably strong labor market and economy.” In June, the Fed forecast two more rate hikes bef …
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Last month, the Fed raised its benchmark interest rate to a range of 5.25% to 5.5%, the highest the Fed target rate has been since 2001. Bowman said she supported that hike, which came after a pause in June, and that she wants to see more signs that the recent 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 said, according to a transcript of her prepared remarks. Bowman reiterated that “monetary policy is not on a preset course,” and said upcoming decisions will be driven by data. “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 said. “Returning inflation to our 2% goal is necessary to achieve a sustainably strong labor market and economy.” In June, the Fed forecast two more rate hikes bef …nnDiscussion:nn” ai_name=”RocketNews AI: ” start_sentence=”Can I tell you more about this article?” text_input_placeholder=”Type ‘Yes'”]