The Federal Open Market Committee (FOMC) will need to raise interest rates further this year to keep inflation below its target, three officials said on Monday.
“Inflation is still far too high,” Federal Reserve Vice Chairman Barr said at a meeting at the Washington think tank Bipartisan Policy Center (BPC). “We have made a lot of progress in monetary policy over the past year or so.
Fed Vice Chairman Barr
Photographer: Nathan Howard/Bloomberg
The FOMC left the policy rate unchanged at 5-5.25% at its June meeting. FOMC forecasts revealed that most participants expected a combined 0.5 percentage point rate hikes this year.
“Two more rate hikes are likely to be needed this year to ensure inflation is back on track with a sustainable 2% level,” San Francisco Fed President Daly told the Brookings Institution in Washington. rice field.
Video: San Francisco Fed President Daly
Source: Bloomberg
Speaking at an event at the University of California, San Diego, Cleveland Fed President Mester also said his view was “in line” with the FOMC’s forecast of two rate hikes this year, adding that he expected inflation to continue and be timely. My view is that the policy rate will need to rise somewhat further from current levels to ensure a return to 2% in a consistent fashion. We need to keep the policy rate unchanged for a while as we collect
The next FOMC meeting will be on the 25th and 26th of this month. The market is widely expected to decide to raise the policy interest rate.
Daley said the risks of under-reacting were still greater than over-acting to curb inflation. He also acknowledged that the gap between the two is narrowing. He also said there were signs of an economic slowdown and the supply-demand balance was improving.
The June employment report, released on Thursday, showed a slowdown in the number of employees, but wages continued to grow steadily. Mester said the current pace of wage growth “is still well above levels consistent with 2% inflation, given the expected productivity growth trend.”
U.S. jobs growth slows in June; wages still suggest strong labor market (3)
Core inflation remains a concern for the Fed. The personal consumption expenditures (PCE) headline price index posted its slowest year-on-year growth in almost two years in May, but the core price index rose 4.6%, suggesting underlying inflation persisted. “Inflation is the biggest challenge for us,” said Daly.
The consumer price index (CPI) for June will be released on the 12th. The median forecast of economists surveyed by Bloomberg forecast core CPI to rise 0.3% from the previous month and slow to 5% from a year earlier.
Atlanta Fed President Raphael Bostic has drawn a line from many officials, saying inflation is too high and policymakers can be patient for now amid signs of a slowdown. I drew.
“My view is that the Fed can be patient. “We continue to see signs that the economy is slowing, which suggests that restraint is working,” he said.
Original title:Fed Officials Say Higher Rates Needed to Reach 2% Inflation Goal(excerpt)
2023-07-10 20:08:00
#FOMC #rate #hikes #hit #inflation #target #officials
