The Federal Open Market Committee will likely need to continue raising the federal funds rate to meet its goal of returning inflation to its 2% target, Federal Reserve Governor Michelle Bowman said today. Speaking at a conference in Colorado, Bowman noted that the FOMC held off raising the rate at its most recent meeting, but she added that further rate hikes would probably be appropriate given that inflation remains too high. She pointed to recent data showing that inflation rose, partly because of higher oil prices.
“Given the mixed data releases—strong spending data but a decline in inflation and downward revisions to jobs created in previous months—I supported the FOMC’s decision to maintain the target range for the federal funds rate,” Bowman said. “But I continue to expect that further rate hikes will likely be needed to return inflation to 2% in a timely way.”
Bowman also encouraged bankers to provide input on several policy proposals before the Fed and other banking agencies, including proposed capital standards for banks with more than $100 billion in assets. “I recognize that in some instances, multiple, interrelated proposals out for comment at the same time may complicate or even frustrate the ability to provide meaningful comment,” she said. “Even so, I strongly encourage your participation to inform the rulemaking process.”