Fed’s Bowman says more U.S. rate hikes likely will be needed

https://www.cnbc.com/2023/08/05/feds-bowman-says-more-us-rate-hikes-likely-will-be-needed.html

The U.S. Federal Reserve will likely need to raise interest rates further to bring down inflation, Governor Michelle Bowman said on Saturday. Bowman said she supported the Fed’s quarter-point increase in interest rates last month, given still-high inflation, strong consumer spending, a rebound in the housing market and a labor market that is helping to feed higher prices. “I also expect that additional rate increases will likely be needed to get inflation on a path down to the FOMC’s 2 percent target,” she said in remarks prepared for delivery to the Kansas Bankers Association, referring to the Fed’s rate-setting panel, the Federal Open Market Committee.

Monetary policy is not on a “preset course,” she also said, and data will drive future decisions. “We should remain willing to raise the federal funds rate at a future meeting if the incoming data indicate that progress on inflation has stalled.” Bowman has frequently expressed views that are more hawkish than some of her colleagues. In forecasts published in June, most Fed policymakers expected to end the year with the Fed policy rate at 5.6%, one quarter-point hike above the setting established at the Fed’s late-July meeting. Bowman’s use of the plural “rate increases” in her remarks on Saturday indicates she thinks the Fed will need to go higher than that.