The Federal Reserve's No. 2 official on Friday added her full endorsement of the U.S. central bank's higher-for-longer game plan for interest rates to curb inflation that new data shows is still running at more than three times policymakers' 2% target.
to raise its benchmark interest rate by three-quarters of a percentage point for a third straight time, Fed Vice Chair Lael Brainard said: "Monetary policy is focused on restoring price stability in a high-inflation environment."
Fed officials have continued in the past week to beat the drum for an aggressive campaign to lower the highest levels of inflation seen in the United States in 40 years. The central bank's policy rate is now in the 3.00%-3.25% range, a full 3 percentage points higher than where it was at the start of 2022, and policymakers have penciled in more rate rises later this year and in 2023.
"At this point the risk of inflation festering feels like a bigger risk than inflation coming down on its own and us having oversteered," Barkin said in comments to reporters after remarks to business officials in Virginia.The Fed officials' remarks coincided with the release of the latest reading of the Fed's preferred measure of inflation, which showedThe personal consumption expenditures price index rose 6.
"Inflation expectations are likely to remain relatively unstable in the months ahead, as consumer uncertainty over these expectations remained high and is unlikely to wane in the face of continued global pressures on inflation," the Michigan survey said. "Uncertainty is currently high, and there are a range of estimates around the appropriate destination of the target range for the cycle," she said. The Fed will have to feel its way forward and see how its rate rises work through the economy, and will act "deliberately and in a data-dependent manner" with future policy actions.
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