Fed’s Bowman: Further Rate Hikes Needed to Tackle High Inflation
Federal Reserve Governor Michelle Bowman reiterated her belief that inflation remains too high, despite some progress in lowering it. She emphasized that the central bank will likely need to tighten monetary policy further to address this issue.
Bowman expressed her expectation that it would be appropriate for the Fed to raise interest rates and maintain them at a restrictive level for some time. This approach aims to bring inflation back to the desired 2 percent goal in a timely manner. She also stated her willingness to support rate hikes if incoming data suggests a lack of progress or slow movement towards the inflation target.
These remarks echo Bowman’s previous comments on the economic and policy outlook, emphasizing the importance of addressing inflation concerns.
The US Labor Department’s recent report revealed that employers added nearly double the expected number of jobs in September. Additionally, job gains for previous months were revised higher. Bowman, known for her hawkish stance, praised this report, describing the job growth as “solid.”
However, Bowman acknowledged the challenge of predicting the future trajectory of the economy due to frequent revisions in data. She highlighted that downward revisions in job growth, as reflected in previous government reports, influenced her support for maintaining the benchmark interest rate within the 5.25%-5.50% range.
It is crucial to carefully analyze economic indicators to make informed policy decisions, given the complexity and uncertainty of the current economic landscape. Bowman’s commitment to addressing inflation and her consideration of various factors demonstrate her determination to promote stability and achieve the Fed’s inflation target.