Despite positive inflation data this week, Richmond Fed President Thomas Barkin said on Friday that more interest rate increases will be needed to curb price pressures.
“So we are happy to see inflation start to decline,” he added. But he noted, “I would like to see a period of continued inflation under control, and until we do, I think we will just have to keep moving prices into restricted territory.”
However, this was just one month’s data: the CPI is still up 8.5% y/y, and the PPI is up 9.8%. Both numbers are still well above the Fed’s long-term inflation target of 2%, so Barkin said the central bank needs to keep moving forward until it achieves its target.
“You’d like to see inflation moving toward our target, which is 2% in PCE, and I’d like to see it walk toward our target for a while,” he said. The Federal Reserve uses the PCE price index as its preferred measure; June The main PCE rate was 6.8% While the main percentage, excluding food and energy, was 4.8%.
Parkin’s comments reflect those of Most Federal Reserve officials Who recently talked about prices.
The central bank has Raising the benchmark borrowing rate by 0.75 percentage points In each of its last two meetings. Markets are divided over whether the Federal Reserve will rise by three-quarters of a point in September or shrink by half a point, with traders leaning slightly toward the latter, according to data from CME Group Friday morning.
Whatever the case, Parkin said acting aggressively now is important. He said his voters are very concerned about inflation and want action from the Fed.
“Consumers really hate inflation, and the message I’m making loud and clear as I walk around my area is that we don’t like inflation,” he said.
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