USA: We will have to be firm to bring inflation back to 2% – Bullard (Fed)
WASHINGTON, Aug 3 (Reuters) – The Federal Reserve (Fed) is determined to raise interest rates to bring inflation, which has not been so high in four decades, back to the 2% target set by central bank, said Wednesday the president of the antenna of Saint-Louis, James Bullard.
“We’re going to be tough and make sure that happens,” James Bullard said in an interview with CNBC. “I think we can take strong action and get back to 2%.”
With inflation showing no signs of easing yet, the Fed will need to see evidence – through headline and core inflation measures – that price pressures are easing before officials of the issuing bank may have the feeling that they are doing enough.
Other Fed officials said on Tuesday that the central bank remained committed to raising rates to a level that could more significantly dampen economic activity and stave off inflation.
Mary Daly, president of the San Francisco Fed, also said she was “perplexed” by the movements of the bond market which incorporate expectations of a rate cut in the first half of 2023.
She said she instead expected the Fed to keep raising rates for now and hold them there “for a while”, comments that sparked a sell-off in markets state loans.
Last week, the Fed raised its main interest rate by 75 basis points and its chairman, Jerome Powell, signaled that another “unusually large” rate hike may be appropriate in September if inflation does not subside. not enough. (Report Lindsay Dunsmuir, French version Laetitia Volga, edited by Jean-Michel Bélot and Kate Entringer)