Fed Governor Michelle Bowman Says Interest Rates Will Have to Go Higher to Tame Inflation
In order to keep interest rates at a high enough level to bring about a rel=”https://www.theepochtimes.com/t-inflation”>inflation back down to the central bank’s target rate, Fed Governor Michelle Bowman said on Monday.
“I expect we’ll continue to increase the federal funds rate because we have to bring inflation back down to our 2 percent goal and in order to do that we need to bring demand and supply into better balance,” Bowman made these remarks at the American Bankers Association conference, Florida.
The Fed’s benchmark overnight lending rate is currently in the 4.50 percent–4.75 percent range. When interest rates are at a sufficient restrictive level, they will need to be maintained. “some time” Bowman spoke out in order to restore price stability. She did not offer any specifics about the rate peak that she would like to see.
Last week, several Fed policymakers agreed with the sentiment that more rate rises were needed. However, none of them were willing to suggest that January’s huge job gains could lead to Fed officials adopting a more aggressive monetary stance.
By the Fed’s preferred measure, inflation is still running at a 5 percent annual rate.
Bowman stated that an extremely strong labor market and moderate inflation were indicators of a “economically sound” economy. ‘soft landing’ remains possible.
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