Fed officials see need for one more rate hike this year
Two Federal Reserve officials said the US central bank likely needs to raise interest rates once more this year to curb inflation. New York Fed President John Williams and Boston Fed President Susan Collins both signalled further tightening, though future moves would depend on incoming data.
Two senior Federal Reserve officials have said the US central bank will likely need to raise interest rates one more time this year to bring inflation under control.
New York Federal Reserve Bank President John Williams reiterated that the Fed probably needs one additional rate increase this year, according to an interview with Bloomberg News. He said he does not expect any further hikes next year and predicted inflation would gradually ease back to the Fed's 2 per cent target over time.
However, Williams noted that high energy prices stemming from the conflict in the Middle East were affecting short-term price pressures, while investment related to the technology sector was also pushing inflation higher.
Boston Federal Reserve Bank President Susan Collins also said the Fed needs to raise rates again before the end of this year to contain elevated inflation. She added that whether further action would be needed, and the appropriate timing, would depend largely on how subsequent data affect the economic outlook and the related balance of risks.
Both officials' comments come as the Fed continues to grapple with inflation that, while cooling from multi-decade highs, remains above its 2 per cent target. The central bank has raised rates aggressively over the past two years in an effort to slow price growth without triggering a sharp economic downturn.
Financial markets will be watching upcoming economic data, particularly inflation reports and labour market figures, for clues on the pace of future policy moves.