Barr Hints at Rate Hike if Inflation Doesn't Moderate
Federal Reserve Governor Michael Barr signaled that interest rates may be increased if inflation does not moderate. Speaking at the Second Chance Lending Forum, Barr emphasized that inflation has been too high for over five years and remains a concern.
Barr noted that the Fed's September 15-16 monetary policy meeting provides an opportunity to reassess policy choices. He stated that if inflation appears not to be moderating sufficiently, then rates should be raised decisively. However, if trends in the data indicate that inflation is moving towards a 2% target, more time can be taken to assess the policy stance.
The Fed's Chairman Kevin Warsh also hinted at the possibility of a rate hike during his speech at the Kansas City Fed's annual Jackson Hole economic symposium. He emphasized the importance of being confident that underlying inflation is moving towards the 2% target at sufficient speed.