Top Fed officials are increasingly backing another 0.75 percentage point rate hike at their next policy meeting in July, as the central bank stepped up its commitment to tackling price spikes.
On Thursday, Michelle Bowman became the latest Fed The governor said early support for the move “based on current inflation data”, adding that “at least” half a percentage point additional rate hike may be necessary in the next few meetings, “as long as incoming The data back them up”.
“Depending on how the economy develops, the target range for the federal funds rate may need to be raised further,” she said in a speech at an event hosted by the Massachusetts Bankers Association.
Bowman joins Fed Governor Christopher Waller, who Confirmed on Saturday The central bank is “all-in on re-establishing price stability” and said he would support another big rate hike next month if the data are as expected.
Dovish Minneapolis Fed President Neil Kashkari also said the move may be necessary, but added that it might be “prudent” to cut rates to half a percentage point after July.
Support for another aggressive rate adjustment grows just days after the Fed implemented rates The first rate hike by 0.75 percentage points Since 1994, it has expressed support for sharply tightening monetary policy this year. Most officials now expect the federal funds rate to rise to around 3.75% by December from its current target range of 1.50% to 1.75%.
Bowman said she expects the labor market to remain strong as the Fed raises rates, noting that demand for workers is historic despite supply constraints, but added that the Fed’s actions “are not without risk.”
“But in my view, our primary responsibility is to reduce inflation,” she said. “Maintaining our commitment to restoring price stability is the best way to support a sustainably strong labor market.”
Bowman’s comments echo those made by Federal Reserve Chairman Jay Powell during his testimony before Congress this week.
he tell members of the Senate A U.S. recession is “certainly a possibility” as the central bank ramps up efforts to combat soaring prices, but he added that failing to control inflation would “hurt the people we want to help, the low-income population.”
During Thursday’s House hearing, Powell said the Fed’s commitment to restore price stability is “unconditionalwhich shows a willingness to endure unemployment or even a recession to get there.