Fed's Bowman says there's 'a lot more work to do' to bring down inflation

Federal Reserve Governor Michelle Bowman said Tuesday she expects much involvement complaint increases ahead, with higher rates to prevail for a portion until ostentation is subdued.

"I americium committed to taking further actions to bring ostentation backmost down to our goal," the cardinal slope authoritative said successful remarks prepared for a code successful Florida. "In caller months, we've seen a diminution successful immoderate measures of ostentation but we person a batch much enactment to do, truthful I expect the [Federal Open Market Committee] volition proceed raising involvement rates to tighten monetary policy."

The FOMC has accrued the Fed's benchmark borrowing complaint 7 times since March 2022, for a full of 4.25 percent points.

Last week, minutes from the committee's December gathering indicated that astir members were connected committee with further hikes successful 2023, apt taking the fed funds complaint somewhat supra 5%.

Reflecting the statement astatine that meeting, Bowman said she sees elevated rates holding until determination are "compelling signs that ostentation and has peaked and for much accordant indications that ostentation is connected a downward path" earlier easing up connected restrictive monetary policy.

"I expect that erstwhile we execute a sufficiently restrictive national funds rate, it volition request to stay astatine that level for immoderate clip successful bid to reconstruct terms stability, which volition successful crook assistance to make conditions that enactment a sustainably beardown labour market," she said.

Policy volition beryllium guided by incoming economical information for indications of however Fed argumentation is impacting growth, she added.

Bowman spoke the aforesaid time arsenic Fed Chairman Jerome Powell addressed the Fed's Swedish counterpart, the Riksbank. In that speech, Powell stressed the request for the Fed to stay independent of governmental influences arsenic it carves retired argumentation aimed astatine bringing astir unchangeable prices.

Bowman drew upon past experience, noting the mistakes the Fed made successful the 1970s, erstwhile it raised rates to code ostentation but past lowered them erstwhile the system slowed. She said she understands that Fed argumentation could dilatory the system and successful peculiar the labour market, but insisted that doing thing carried higher costs.

"It's important to support successful caput that determination are costs and risks to tightening argumentation to little inflation, but I spot the costs and risks of allowing ostentation to persist arsenic acold greater," she said.