The US Federal Reserve must continue to raise interest rates to bring inflation under control, a senior bank official said Friday.
Fed Governor Michelle Bowman told a conference in Colorado that the central bank has made "considerable progress" in lowering inflation, but it remains "too high." She said she expects further rate hikes will be needed to return inflation to the Fed's long-term target of 2%.
"I see a continued risk that energy prices could rise further and reverse some of the progress we have seen on inflation in recent months," Bowman said. "We should remain willing to raise the federal funds rate at a future meeting if the incoming data indicates that progress on inflation has stalled or is too slow."
Bowman's comments come as the Fed prepares to meet next week to discuss monetary policy. The Fed has already raised interest rates 11 times since March 2022 in an effort to cool the economy and bring inflation down.
The Fed's rate hikes have had a significant impact on the US economy. Mortgage rates and other borrowing costs have risen sharply, making it more expensive for consumers and businesses to borrow money. This has led to a slowdown in economic activity.
However, the Fed has said it is willing to tolerate a slowdown in order to bring inflation under control. Inflation has been at a 40-year high in recent months, squeezing household budgets and eroding consumer confidence.
Bowman's comments suggest that the Fed is prepared to continue raising interest rates even if it means further pain for the economy. The Fed is facing a difficult balancing act, trying to bring inflation down without causing a recession.
Bowman's comments are a sign that the Fed is taking inflation seriously and is willing to do what it takes to bring it under control. The Fed's rate hikes have already had a significant impact on the economy, but they are likely to continue for some time.
Consumers and businesses should be prepared for further increases in borrowing costs. This could lead to a slowdown in economic activity, but it is necessary to bring inflation down.
The Fed is facing a difficult balancing act, but it is important to remember that its primary goal is to maintain price stability. If the Fed can succeed in bringing inflation down, it will be good for the economy in the long run.
