The governor of the Federal Reserve (Fed), Michelle Bowman, was in favor of a more aggressive rate hike path than the one currently considered by most of her colleagues at the central bank, stating that she wants them to rise until they exceed inflation expectations. short term.
“Based on current inflation readings, I expect a further 75 basis point rate hike to be appropriate at our next meeting, as well as hikes of at least 50 basis points at subsequent meetings, provided the incoming data supporthe told the Massachusetts Bankers Association conference.
“Depending on how the economy evolves, further increases may be necessary afterwards.“, he pointed.
Bowman made the remarks as Fed Chairman Jerome Powell fielded questions from lawmakers about inflation and a possible recession for a second day on Capitol Hill.
They also come just over a week after the Fed raised rates by 75 basis points, to a target range of 1.5%-1.75%, and released forecasts showing most policymakers expect rates to hold. to rise to 3.4% by the end of the year.
Bowman, who called inflation a threat to sustained job growth, said he is “committed to monetary policy that returns the Fed’s real interest rate to positive territory”, and stated that “Has no sense” that the rate is below short-term inflation expectations.
One indicator of near-term inflation expectations is the University of Michigan’s one-year reading, which rose to 5.4% in June.
Inflation itself is more than three times the Fed’s 2% target.