Federal Reserve Official Leaves Door Open for Interest Rate Hike to Tackle Inflation
Last Updated: May 10, 2023, 02:09 IST
The Fed has embarked on a forceful campaign of rate hikes since March last year to rein in inflation. (Photo: Reuters)
The comments by New York Fed President John Williams came a week after policymakers unveiled a tenth and possibly final rate increase in the current cycle
A top Federal Reserve official left the door open Tuesday on a further interest rate hike to combat inflation, although stressing that the US central bank’s future decisions must be data dependent.
The comments by New York Fed President John Williams came a week after policymakers unveiled a tenth and possibly final rate increase in the current cycle, adding that they would consider the impact of existing hikes before determining further moves.
But on Tuesday, Williams told the Economic Club of New York: “We haven’t said we’re done raising rates.”
He acknowledged “incredible progress over the past year or so” in lifting rates to bring inflation down, but added: “I think what we’re going to need to do as we always do is be data dependent.”
Williams also said he does not see “any reason to cut interest rates this year” in his baseline forecast, citing a need to lower stubborn inflation.
“In my forecast, we need to keep a restrictive stance of policy in place for quite some time to make sure we really bring inflation down,” he added.
The Fed has embarked on a forceful campaign of rate hikes since March last year to rein in inflation.
Its quarter-point increase last week lifted the target lending range to between 5.0 percent and 5.25 percent, marking the highest level in around 16 years.
While US economic growth has since lost steam, with some analysts warning of a possible downturn, Williams said Tuesday that he does not expect to see a recession.
But he added that he expects the unemployment rate to gradually inch up over the next year as the labor market cools.
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(This story has not been edited by News18 staff and is published from a syndicated news agency feed)