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Fed's Bowman: more 75 basis-point hikes should be on the table

Economy Aug 06, 2022 12:56PM ET
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© Reuters. FILE PHOTO: U.S. Federal Reserve Governor Michelle Bowman gives her first public remarks as a Fed policymaker at an American Bankers Association conference in San Diego, California, U.S., February 11 2019. REUTERS/Ann Saphir/File Photo

By Lindsay (NYSE:LNN) Dunsmuir

(Reuters) - The U.S. Federal Reserve should consider more 75 basis-point interest rate hikes at coming meetings in order to bring high inflation back down to the central bank's goal, Fed Governor Michelle Bowman said on Saturday.

"I supported the FOMC's decision last week to raise the federal funds rate another 75 basis points," Bowman said in prepared remarks to a Kansas Bankers Association event in Colorado, referring to the Federal Open Market Committee that sets monetary policy. "My view is that similarly-sized increases should be on the table until we see inflation declining in a consistent, meaningful, and lasting way."

A procession of policymakers this week have shown stiffening resolve to continue the aggressive monetary tightening, with nearly all of them making plain the central bank remains determined to press ahead with rate hikes until it sees strong and long-lasting evidence that inflation is on track to back down to the Fed's 2% target.

Fed Chair Jerome Powell already flagged last week the central bank may consider another "unusually large" rate hike at the Sept. 20-21 meeting, seen as a decision between a 50 basis- point or 75 basis-point move, with officials guided in their decision making by a ream of critical data points covering inflation, employment, consumer spending and economic growth between now and then.

Inflation has for months confounded expectations that it would ease and is now, by the Fed's preferred measure, running at more than three times the target.

The Fed is under renewed pressure to deliver another 75 basis-point interest rate hike at its upcoming meeting next month as fresh data on Friday showed job gains unexpectedly accelerating despite soaring inflation and rising borrowing costs.

Bowman added that she still retains an open mind on the magnitude of hikes depending on how the economy evolves.

"While I expect that ongoing rate increases will be appropriate, given the uncertainty in how those data and conditions will evolve, I will allow that information to guide my judgment on how big the increases will need to be," she said, although she noted that she expects supply-chain issues partly driving inflation to likely persist.

Fed's Bowman: more 75 basis-point hikes should be on the table
 

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Comments (3)
David Beckham
David Beckham Aug 06, 2022 2:13PM ET
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Every time they show how they are aggressive they market squeeze
Kerry Ditto
Kerry Ditto Aug 06, 2022 1:46PM ET
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Fed's inflation target should be revised to 4%.
Kelly Mayer
Kelly Mayer Aug 06, 2022 12:58PM ET
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More! More! More! Sink the credit market! Cause another 2008 and have Blackrock buy half the world's real estate so we rent everything and own nothing!
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nick cage
nick cage Aug 06, 2022 12:58PM ET
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Edward Chong They need to be at 8%
Stephen Fa
Stephen Fa Aug 06, 2022 12:58PM ET
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Long BX
Stephen Fa
Stephen Fa Aug 06, 2022 12:58PM ET
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lol meant $BLK
Kris Jay
Kris Jay Aug 06, 2022 12:58PM ET
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Edward Chong  unlikely today but by Jan 2023 that is what you will have.
Tom Scheuermann
Tom Scheuermann Aug 06, 2022 12:58PM ET
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how long can they do that for? 5% x 30 trillion debt is 1.5 trillion from tax receipts of 4 t.
 
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