Federal Reserve Bank of Richmond President Thomas Barkin said it is important for the central bank to continue to raise interest rates to ensure it brings inflation back to the 2% target.
“With demand slowing but still resilient, labour markets healthy and the added and unfortunately enduring shock of the war in Ukraine, it shouldn’t be a surprise that inflation — while likely past its peak — is still elevated,” Barkin said in an online interview posted on the Richmond Fed website. “That, of course, is what makes the case for us to stay the course.”
Federal Reserve Chair Jerome Powell said this week that further rate hikes would be needed to quash inflation. Investors have lifted where they see rates peaking this year and are now largely in line with policy makers’ projection following the much stronger-than-expected January employment report.
Barkin said while the past three monthly inflation reports have been positive, the Fed can’t take for granted that will continue.
“Until we’re confident that the things people care about are under control, I think we’ve still got a ways to go,” he said.
