According to Fed Governor Michelle Bowman, a potential interest rate hike is still on the table, and inflation looks like it will stay high for some time.
In remarks prepared for a Massachusetts Bankers Association meeting, Bowman stated, “Even though the current stance of monetary policy appears to be at a restrictive level, I remain willing to raise the federal funds rate at a future meeting should the incoming data indicate the progress on inflation has stalled or reversed.”
See also: Powell maintains the possibility of a July rate drop at the Fed
According to Bowman, in March, the annualised 3-month core PCE inflation increased to 4.4%.
According to her, “the recent uptick appears to be noticeable in a number of goods and services categories, indicating that inflation was momentarily lower in the second half of last year.”
Following Fed Chair Jerome Powell’s press conference and the Fed’s publishing of its policy statement, Bowman is the first speaker from the Fed.
The Federal Reserve made the decision to maintain the policy rate at the 5.25–5.5% level that it has been in since late July.
Powell claimed that few Fed officials were in favour of raising interest rates.
According to economists, raising interest rates is still unlikely. This could alter if customers start to anticipate higher prices or if inflation picks up speed.
