Moscow, (Business News Report)|| The US Federal Reserve said that the inflation rates that the United States is currently experiencing will raise interest rates next March.
Michelle Bowman, a member of the US Federal Reserve Board of Governors, explained that raising interest rates in March remains subject to data, and all indicators support raising interest rates.
“I intend to support prompt and decisive action to lower inflation.” Bowman added.
She stressed that if the economy develops as she expects, “a more interest rate hike will be appropriate in the coming months.”
She did not specify the extent of the increase she expects at this stage.
“I, as all of my colleagues will as well, will be watching the data closely to judge the appropriate size of an increase at the March meeting,” she said in a speech to a banking conference.
US inflation is at its highest rate in four decades, which has damaged the popularity of President Joe Biden and dealt a blow to families and businesses in the world’s largest economies.
The markets are awaiting the first increase in interest rates during the meeting of the Federal Open Market Committee (FOMC) on March 15-16. Some economists expect an increase of 50 percentage points, twice the normal increase.
In her speech, Bowman also said she expects additional rate increases will be needed in the coming months in keeping with her view that “much too high” inflation will not begin to moderate until the second half of this year.
“Looking beyond this spring, my views on the appropriate pace of interest rate increases and balance sheet reduction for this year and beyond will depend on how the economy evolves,” Bowman said.
She said labor market conditions are currently in line with the Fed’s goal of securing full employment. The unemployment rate in January was 4%, and employers are facing a problem related to a large shortage of labor.
Another measure that would help slow inflation would be balancing the Federal Reserve. The Fed has been seeking since November to reduce its monthly purchases of stocks and bonds that are aimed at supporting the economy in the face of the repercussions of COVID-19.
