Fed’s Bowman: Further interest rate hikes likely appropriate amid continued high inflation

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.


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