Interest rates will need to remain elevated for 'some time,' according to Federal Reserve Vice Chair Lael Brainard, as the central bank tries to tame inflation.
Former White House Office of Management and Budget Director Russ Vought says the Biden administration has made the Federal Reserve's job 'worse.'
"Monetary policy will be restrictive for some time to ensure that inflation moves back to target over time," Brainard said. "It will take time for the cumulative effect of tighter monetary policy to work through the economy and to bring inflation down." In its latest move, the Fed approved a third consecutive 75-basis-point rate hike, lifting the federal funds rate to a range of 3% to 3.25% – near restrictive levels. It also indicated that more super-sized increases are likely in the coming months.
Brainard – the Fed's No. 2 and a permanent voting member of the Federal Open Market Committee – said during prepared remarks delivered before the National Association for Business Economics in Chicago that the economy is likely to cool over the next year as rates remain elevated.
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