Bowman (FED): To consider more rate hikes of 75 bp.

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The U.S. Federal Reserve should consider more interest rate hikes of 75 basis points in upcoming meetings to reduce high inflation back to the central bank’s target, Fed Chair Michelle Bowman said on Saturday, according to Reuters.

“I supported the Federal Open Market Committee’s (FOMC) decision last week to raise the federal funds rate by another 75 basis points,” Bowman said in prepared remarks at a Kansas Bank Association event in Colorado, referring to the FOMC setting monetary policy. “My view is that increases of a similar size should be on the table until we see inflation coming down in a consistent, meaningful and sustained way.”

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A number of policymakers this week showed an increasing determination to continue aggressive monetary tightening, with almost all making clear that the central bank remains determined to hike interest rates until it sees strong, long-term signs that inflation is on track to return to the Fed’s 2% target.

Fed Chairman Jerome Powell already signaled last week that the central bank may consider another “unusually large” rate hike at its September 20-21 meeting, seen as a decision between a move of 50 basis points or 75 basis points , with officials guided in their decision-making by critical data covering inflation, employment, consumer spending and economic growth between now and then.

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Inflation has defied expectations of easing for months and is now running more than three times above target, according to the Fed’s preferred measure.

The Fed is under renewed pressure to make another 75 basis point rate hike at its upcoming meeting next month as new data on Friday showed employment growth unexpectedly accelerated despite a jump in inflation and rising costs lending.

Bowman added that she remains open to the size of the increases depending on how the economy plays out.

“While I expect continued rate hikes to be appropriate given the uncertainty of how these data and conditions will play out, I will allow this information to guide my judgment on how large the hikes should be.” , he said, though he noted that he expects the supply chain issues that partly drive inflation will likely remain.

Source: Capital

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