Fed's Bowman: Ready for Rate Hikes if Inflation Remains Stubborn

Fed's Bowman: Ready for Rate Hikes if Inflation Remains Stubborn

Federal Reserve Governor Michelle Bowman has emphasized the importance of maintaining the current federal funds rate to achieve the Fed's 2% inflation target, cautioning against premature rate cuts. Speaking in London, Bowman highlighted that there has been only modest progress on inflation in 2024. She pointed to factors such as increased immigration and labor market tightness as potential risks that could exacerbate core services inflation.

Bowman remains open to raising interest rates if inflation does not show signs of further abatement. While she acknowledges the need to eventually lower the federal funds rate to avoid overly restrictive monetary policy, Bowman stressed that any such decision would depend on sustained progress towards the inflation target. She also warned of other potential risks to inflation, including regional conflicts and financial conditions. The Fed has kept the policy rate in the 5.25%-5.50% range since July.

Summary

Other news in finance