An official from the American central bank (Fed) judged on Saturday that additional rate hikes would certainly prove necessary to bring inflation down further in the United States, after already 11 increases since March 2022.
I expect…that additional rate increases will likely be needed to bring inflation back to the Fed’s target of 2%, said Michelle Bowman, one of the institution’s governors, during a speech Colorado Springs (Colorado).
The recent drop in inflation was positive, she said. Inflation, in fact, fell to 3.0% over one year in June, both for the PCE index, favored by the Fed, and for the CPI, which is the benchmark.
We should remain open to raising the federal funds rate at a future meeting if data indicate that progress on inflation has stalled, Bowman said.
She said she would also watch for signs of a slowdown in consumer spending and signs of easing labor market conditions, which will show whether economic activity is slowing, a necessary condition for pricing pressure to be eased sustainably. .
Another Fed official, Austan Goolsbee, president of the Chicago office, who this year has rotating voting rights at meetings, had for his part raised the possibility of a new break.
If the economic data to be released between now and the September 19-20 meeting shows that inflation continues to ease and economic activity and employment remain strong, I think everyone will be comfortable staying where we are, he had said.
The unemployment rate fell to 3.5% in July, but job creations were fewer than expected, and those of the two previous months were revised downwards.
The Fed last week raised rates for the 11th time since March 2022, after a pause at its previous meeting in mid-June. Its main key rate is now in a range of 5.25 to 5.50%.
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