Online News Bulletin News
The US central bank needs to keep raising interest rates in big steps until inflation starts to come down, Federal Reserve Governor Christopher Waller said Monday. Online News
The Fed early this month announced the biggest increase in the benchmark interest rate since 2000, following a smaller hike in March, as it aims to tamp down the highest inflation in more than 40 years.
Waller said he supports more half-point rate hikes “for several meetings.”
“I am not taking 50 basis-point hikes off the table until I see inflation coming down closer to our two percent target,” he said in a speech prepared for delivery to a monetary policy conference at Goethe University.
Markets are expecting a total of 2.5 percentage points of tightening this year, including the 0.75 point of increases already implemented after the Fed’s policy-setting Federal Open Market Committee (FOMC) shifted to a more aggressive stance as price increases accelerated.
But “if we need to do more, we will,” Waller said.
Food and energy prices have surged in the wake of the Russian invasion of Ukraine, adding to the inflation pressures.
The Fed’s preferred inflation measure in April showed the pace of increases slowing, but Waller said the rate has remained above four percent for about a year and “is not coming down enough to meet the Fed’s target anytime soon.”
If the momentum is allowed to get out of control it will be even harder and more painful to contain, he warned.
“I cannot emphasize enough that my FOMC colleagues and I are united in our commitment to do what it takes to bring inflation down and achieve the Fed’s two percent target.”
hs/mdl
© Agence France-Presse. All rights are reserved.
Bulletin News Online News
