A second Fed governor speaks. FOMC member Bowman said:
- Further interest rate hikes would likely be appropriate in a context of “still too high” inflation.
- Fed policy will need to remain restrictive “for some time” to bring inflation back to 2% “in a timely manner.”
- The continued risk of further rises in energy prices could reverse some of the recent progress in reducing inflation.
- The economy continues to grow at a “solid pace,” with robust consumer spending and solid job creation.
- Bank lending standards have tightened, but there is no sign of a “sharp contraction” in credit that would significantly slow the economy.
- Progress on inflation is expected to be “likely slow” under current conditions, suggesting the need for even tighter policy.
- It is imperative that bankers give their opinion on recent plans to tighten banking rules.
Bowman’s comments are a bit more hawkish than Collins’ earlier in the day. It’s interesting that she says “further interest rate increases” – plural.