Fed's Barr Warns of Further Rate Hikes to Tame Inflation
Federal Reserve Governor Michael Barr said that additional rate increases are likely needed to bring inflation back to its target of 2% in a timely manner.
In prepared remarks for an event in Chicago on September 23, Barr stated that 'further rate adjustments will likely be necessary' to address the risks surrounding inflation.
The Fed raised its benchmark rate by 0.25 percentage point on September 16, marking the first rate increase since July 2023. This move has led to a jump in average U.S. 30-year fixed mortgage rates to 7.12%, the highest since May 2024.
Barr noted that risks surrounding the labor market have eased, but inflation remains a concern. He emphasized the need for monetary policy adjustments to reflect the balance of risks around the central bank's mandated goals.