In separate speeches today, Federal Reserve Governors Christopher Waller and Michelle Bowman gave differing answers to the question of whether the Fed would need to continue raising the federal funds rate to tame inflation, although both cautioned there remains much uncertainty in the economic outlook.
The Federal Open Market Committee left the federal fund rate’s target range unchanged at 5.25% to 5.5% during its previous two meetings—an extended pause following a series of rate hikes that kicked off in early 2022. The FOMC next meets in mid-December. Speaking at an event in Washington, D.C., Waller said that he is “increasingly confident” that current monetary policy is well-positioned to return inflation to the Fed’s 2% target. “That said, there is still significant uncertainty about the pace of future activity, and so I cannot say for sure whether the FOMC has done enough to achieve price stability,” he said. “Hopefully, the data we receive over the next couple of months will help answer that question.”
During a speech in Salt Lake City, Bowman said she believes the FOMC will need to increase the rate in the future to bring down inflation. Still, she noted a number of uncertainties in her economic forecast, including questions about whether further supply-side improvements will bring down inflation on their own and about future labor force trends. “Monetary policy is not on a preset course, and I will continue to closely watch the incoming data as I assess the implications for the economic outlook and the appropriate path of monetary policy,” she said