Fed Official Says There's 'a Lot More Work To Do' To Bring Down Inflation

Federal Reserve Governor Michelle Bowman said Tuesday she expects more interest rate increases ahead, with higher rates to prevail for a while until inflation is subdued. From a report: "I am committed to taking further actions to bring inflation back down to our goal," the central bank official said in remarks prepared for a speech in Florida. "In recent months, we've seen a decline in some measures of inflation but we have a lot more work to do, so I expect the [Federal Open Market Committee] will continue raising interest rates to tighten monetary policy." The FOMC has increased the Fed's benchmark borrowing rate seven times since March 2022, for a total of 4.25 percentage points. Last week, minutes from the committee's December meeting indicated that most members were on board with additional hikes in 2023, likely taking the fed funds rate slightly above 5%. Reflecting the consensus at that meeting, Bowman said she sees elevated rates holding until there are "compelling signs that inflation and has peaked and for more consistent indications that inflation is on a downward path" before easing up on restrictive monetary policy. "I expect that once we achieve a sufficiently restrictive federal funds rate, it will need to remain at that level for some time in order to restore price stability, which will in turn help to create conditions that support a sustainably strong labor market," she said.

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