Michelle Bowman, US Federal Reserve Governor
Michelle Bowman, member of the Federal Reserve Board of Governors, stressed the need to tighten monetary policy further, to bring inflation rate back to the Central Bank’s target.
She expects interest rates to continue rising over the long term, higher than the pre-COVID levels, Bloomberg reported.
At an event in Utah, the policymaker said, “We will need to further raise interest rate to keep the monetary policy restrained enough, to bring inflation down to our 2% target in due course.”
“I am still willing to support a rate hike at any future meetings, if incoming data indicates that progress on inflation has stalled, or is too slow to achieve the 2% target in a timely manner,” Bowman added.
The member of the Federal Open Market Committee stressed the need to take into account the historical lessons and risks associated with prematurely declaring victory in the battle against inflation, including the risk of inflation stabilizing at a level higher than its target without further policy tightening.
“Given possible structural changes in the economy, such as higher demand for investment relative to saving, an interest rate level consistent with a low and stable level of inflation is likely to go higher than pre-COVID-19 pandemic,” Bowman concluded.
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