Higher Rates May Be Needed to Curb Inflation, Fed’s Bowman Says
- Fed governor says spending still strong, labor market tight
- Bowman warns higher rates may pose financial stability risks
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Federal Reserve Governor Michelle Bowman said interest rates may need to rise further and stay higher for longer than previously expected to get inflation down to the central bank’s goal.
Despite recent improvements, “inflation remains well above the FOMC’s 2% target. Domestic spending has continued at a strong pace, and the labor market remains tight,” Bowman said Wednesday in remarks prepared for an event in Marrakech, Morocco, on the sidelines of the World Bank/International Monetary Fund annual meetings. “This suggests that the policy rate may need to rise further and stay restrictive for some time to return inflation to the FOMC’s goal.” Bowman explained she was reading a shortened version of her speech because of time constraints.