Barr: Interest Rate Hike Looms if Inflation Persists

The Vice President of Supervision at the Federal Reserve, Michael Barr, has hinted that he will support raising interest rates in September if inflation does not show signs of easing. In a speech, Barr stated that if the data indicates prices are moderating towards the Fed's target of 2%, then more time can be taken to assess monetary policy. However, if inflation remains high, he believes decisive action is needed to raise interest rates.

Barr pointed out that inflation has remained above the target range for five years and is still at elevated levels due to disruptions such as tariffs and the rapid development of artificial intelligence. He emphasized that there is a risk of entrenched inflationary pressures if prices remain high.

The Consumer Price Index in July stood at 3.4% year-on-year, while the PCE price index remained at 3.7%. The Chairman of the Federal Reserve, Kevin Warsh, has also left open the possibility of another interest rate hike in his recent intervention.