Barr Warns US Central Bank May Need Decisive Rate Hike to Combat Persistent Inflation

Federal Reserve Governor Michael Barr has warned that the US central bank may need to raise interest rates decisively if inflation does not moderate sufficiently.

Barr made his comments at the Second-Chance Lending Forum in Washington, where he noted that the US economy remains solid, with a stable labor market and relatively low unemployment.

However, he emphasized that inflation is the key concern for the Federal Reserve, having stayed above its target for over five years. Barr attributed some of the renewed price pressures to a series of shocks, including tariffs, the conflict in the Middle East, and the rapid expansion of AI-related investment.