Two top officials at the Federal Reserve on Tuesday said the U.S. central bank needs to raise interest rates even higher and probably keep them high for...
Two top officials at the Federal Reserve on Tuesday said the U.S. central bank needs to raise interest rates a lot higher and probably keep them high for awhile to contain the worst outbreak of inflation in almost 41 years.
The Fed is “nowhere near” being done in its fight against inflation, said Mary Daly, the San Francisco Federal Reserve Bank president, in a CNBC interview. Chicago Fed President Charles Evans, for his part, said he hoped the Fed could raise rates at a slower pace later in the year. Yet it would depend on whether inflation began to slow, he and Daly both said.
Neither Daly nor Evans is a voting member of the bank’s interest-rate setting panel in 2022. Both have generally been views as inflation “doves,” however, so their stern words suggests other voting members on the Fed are likely to stay aggressive. Higher rates usually slow the economy by raising the cost of borrowing money for businesses and consumers. They tend to invest less and buy fewer big-ticket items such as cars and houses.
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