The Urgency to Address Persistent Inflation
St. Louis Federal Reserve Bank President James Bullard underlined on Monday the pressing need for the U.S. to enact two additional interest rate hikes in 2023. This stringent measure aims to contain the stubbornly persistent inflation-defying control efforts.
The Pricey Reality of a Robust Economy
During a public event, Bullard underscored the need for more speed at which the rate of price increases is declining, despite the robust economic health exhibited by the U.S. in 2023. He stated, "I think we're going to have to grind higher with the policy rate to put enough downward pressure on inflation to return inflation to target promptly."
Two More Hikes on the 2023 Horizon?
Bullard remained adamant that the year would necessitate two more rate increases. He is a vocal advocate for the Federal Reserve to make such aggressive moves promptly to control inflation.
A Decade of Rate Increases: A Pause or Proceed?
In the last year, the Federal Reserve has consecutively elevated its benchmark rate ten times to pull the inflation rate back down to the desirable 2% mark. Yet, post the 25-basis-point increase earlier this month, there is a growing discourse about whether the U.S. central bank should halt its ongoing tightening regime.
Powell's Perspective: Volatility vs. Rate Hikes
Fed President Jerome Powell subtly hinted last week that the current banking sector's volatility might reduce the requirement for as many rate hikes as initially predicted. However, Powell asserted the Federal Reserve could afford to scrutinize recent economic data before making final decisions.