Fed/Bowman: More rate hikes needed

Michelle Bowman, a member of the Federal Reserve's board of governors, said the central bank has more work to do to curb inflation, adding that more interest rate hikes are needed and that officials should keep them at restrictive levels for a while to stabilize prices. “We have seen some inflation measures decline in recent months, but we have more work to do, so I expect the FOMC to continue to raise interest rates as we indicated after our December meeting to tighten monetary policy,” Bowman said Tuesday at an event in Miami with the Florida Bankers Association. As policymakers try to tamp down inflation, which rose to a four-decade high last year, they are sending the message that they are not done tightening. Officials unanimously approved a half-point hike in December, bringing the target on the benchmark interest rate to a range of 4.25% to 4.5%. New economic forecasts released at the meeting showed 17 of 19 Fed officials see rates rising above 5% this year. No policymaker expects to cut rates in 2023. Officials will next meet from Jan. 31 to Feb. 20. Bowman said the scale of future rate moves and when officials will stop raising rates will depend on what’s happening with inflation. He added that he wanted to see “convincing signs that the pandemic is peaking” and was looking for “consistent” evidence that this was happening.