The Fed has raised interest rates by five percentage points since March 2022 to bring down the highest U.S. inflation in four decades
The Federal Reserve will likely need to raise interest rates further to bring down inflation that is still too high, but the end to its current monetary policy tightening cycle is getting close, several U.S. central bank officials said on Monday.
“We’re likely to need a couple more rate hikes over the course of this year to really bring inflation” sustainably back to the U.S. central bank’s 2 per cent goal, San Francisco Fed President Mary Daly said during an event at the Brookings Institution, giving voice to the most common view among her rate-setting peers at the Fed.
Daly said she fully supported June’s policy decision, along with a go-slower approach that allows for more “extreme” data-dependence. “We may end up doing less because we need to do less; we may end up doing just that; we could end up doing more. The data will tell us.” What’s less clear is whether they will raise rates again at the September meeting, wait until November, or just stay on hold and let inflation ease over time.
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