US Fed official expects further rate hike needed
WASHINGTON
A senior US central bank official said on Nov. 7 that she expects another interest rate hike would be needed to lower inflation further, even as officials held rates steady at their latest meeting.
The Federal Reserve's decision last week to hold interest rates at a 22-year high has fueled hopes that policymakers may be done lifting rates.
But Fed Governor Michelle Bowman said in prepared remarks in Ohio: "I continue to expect that we will need to increase the federal funds rate further to bring inflation down to our two percent target in a timely way."
This comes amid "an unusually high level of uncertainty regarding the economy," with data revisions and geopolitical risks, said Bowman, who also sits on the rate-setting Federal Open Market Committee.
While the United States has seen inflation come down from a peak last year, Bowman noted that recent readings "have been uneven."
"I see a continued risk that core services inflation remains stubbornly persistent," she added, referring to a measure of inflation that strips out volatile components like food and energy.
She also highlighted that although data such as job gains have been revised lower at times, average hourly earnings have been revised upwards.
All this complicates the task of predicting how the economy will change, she said.
In announcing that the Fed would hold rates steady last week, Fed Chair Jerome Powell added that the process of lowering inflation "sustainably down to two percent has a long way to go."
