The Federal Reserve will be able to assess how much more it needs to do to bring inflation back to its 2% target when borrowing costs rise to neutral, Richmond Fed Chairman Thomas Barkin told Reuters on Tuesday.
“Once we reach the neutral interest rate range, we can then determine whether inflation remains at the level that requires us to put a brake on the economy or not,” Barkin said in a speech in Maryland.
The official also said the central bank could avoid triggering a 1980s-type recession as part of its efforts to reduce inflation.
“We will do what we have to do,” Barkin said, referring to recent comments by Fed Chairman Jerome Powell that interest rate hikes of 50 basis points are on the table for the next two Fed policy meetings. in June and July.
Source: Capital
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