This week, a number of Federal Reserve presidents and governors stated that additional interest rate increases are required to contain inflation.
They made their remarks in response to one made on Tuesday by Federal Reserve Chairman Jerome Powell, who said that additional interest rate hikes will be required to reduce inflation.
Fed Governor Lisa Cook said the following on Wednesday at a gathering sponsored by the Joint Center for Policy and Economic Studies:
“We are determined to bring inflation down to our target … So I think we are not done yet with raising interest rates, and we will need to keep interest rates sufficiently restrictive.”
The Federal Reserve increased its benchmark interest rate by 25 basis points last week to 4.5%–4.75% after a series of 75-basis-point rate increases in the previous year. Moving to a federal funds rate between 5.00% and 5.25% “seems a very reasonable assessment of what we’ll need to do this year to get the supply and demand mismatches down,” New York Fed President John Williams said at a Wall Street Journal event on Wednesday.
Neel Kashkari, president of the Minneapolis Federal Reserve, added on CNBC on Tuesday that they have a job to do. They are aware that increasing interest rates can control inflation. Added him:
“We need to raise rates aggressively to put a ceiling on inflation, then let monetary policy work its way through the economy … I’m not seeing that we’ve made enough progress yet to declare victory.”
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