US Federal Reserve (Fed) officials left the door open for the continuation of interest rate hikes to reduce inflation. However, two officials pointed out that the problems seen in the banking sector may enable inflation pressures to decrease faster than expected.
“Inflation is still very high and recent indicators reinforce my view that there is still a lot of work to be done to bring inflation down to the 2 percent target linked to price stability,” Boston Fed President Susan Collins said in her speech at the National Association of Business Economics meeting yesterday.
Collins, on the other hand, does not have voting rights on the Federal Open Market Committee (FOMC).
‘There’s still a lot of work to be done’
Minneapolis Fed Chairman Neel Kashkari, who has voting rights in the FOMC, also said the institution has “a lot more work to do”, but did not specify what action he would like the Fed to take.
Richmond Fed President Thomas Barkin said in his statements that monetary policy should be “agile” in current conditions.
Barkin also stated that problems related to the financial sector could help the Fed achieve its mission of reducing inflation to 2 percent more quickly, and warned of the uncertainties that may be seen in the coming period.
