Federal Reserve officials say more interest rate hikes are needed to curb inflation

Several Federal Reserve governors and presidents say more interest rate hikes are needed to curb inflation. “We’re not done raising interest rates yet” said Fed Governor Lisa Cook. “We need to raise rates aggressively to cap inflation” said Neel Kashkari, president of the Minneapolis Federal Reserve.

Fed officials on continuing to raise interest rates

Several Federal Reserve governors and presidents said this week that further interest rate hikes are needed to curb inflation. Their comments follow a similar statement by Federal Reserve Chairman Jerome Powell, who said Tuesday that additional interest rate hikes will be needed to cool inflation.

At an event hosted by the Joint Center for Policy and Economic Studies on Wednesday, Fed Governor Lisa Cook said:

We are committed to bringing inflation back to our target … So I think we are not done with raising interest rates yet, and we will have to keep interest rates sufficiently restrictive.

“We now proceed in small steps“, added Lisa Cook. “This will give us time to assess the effects of our swift actions on the economy.“

After a series of 75 basis point rate hikes last year, the Federal Reserve raised its benchmark interest rate by 25 basis points last week to 4.5%-4.75%.

Citing the January jobs report, which showed 517,000 nonfarm jobs growth, Fed Governor Christopher Waller said Wednesday at Arkansas State University’s agribusiness conference, “We see that this effort is beginning to bear fruit, but we still have a ways to go“. He stressed:

It may be a long struggle, with higher interest rates for longer than some people are now predicting. But I will not hesitate to do what is necessary to complete my task.

New York Fed President John Williams said at a Wall Street Journal event Wednesday that a move to a federal funds rate between 5.00% and 5.25% “seems to be a very reasonable view of what we need to do this year to reduce supply and demand imbalances.“

Meanwhile, Minneapolis Federal Reserve President Neel Kashkari said Tuesday on CNBC, “We have a job to do. We know that raising rates can dampen inflation.“He added:

We need to raise rates aggressively to cap inflation, and then let monetary policy work its way through the economy…I don’t see that we have made enough progress yet to claim victory.