US Federal Reserve Governor Michel Bowman has called for a more aggressive rate hike than most of her colleagues think today, saying she wants to raise interest rates until they exceed short-term inflation expectations, according to the report. Reuters.
“Based on current signs of inflation, I expect an additional 75 basis points increase in interest rates will be appropriate at our next meeting, as well as increases of at least 50 basis points in subsequent sessions, provided that the incoming data supports them.” Bowman said in a statement released today.
“Depending on the development of the economy, further increases in the range of the target for the federal funds interest rate may be needed after that.”
Bowman’s unexpected “hawkish” remarks came as Fed Chairman Jerome Powell responded for a second day in the Capitol to questions from lawmakers about inflation and a possible recession, promising an “unconditional” commitment to easing price pressures.
It comes just over a week after the Fed raised interest rates by 75 basis points and released forecasts showing that most policymakers expect interest rates to rise to 3.4% by the end of the year.
Describing inflation as a threat to sustainable employment growth, Bhuman said she was “committed to a policy that will bring the real interest rate of federal funds back to positive territory” and said it “does not make sense” for the policy rate to be low. from short-term inflation expectations.
Source: Capital
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