Fed's Bowman: Sizable rate hikes should remain on table if inflation not seen moving down

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Fed's Bowman: Sizable rate hikes should remain on table if inflation not seen moving down

<p>Federal Reserve Board Governor Michelle Bowman speaks on "Forward Guidance as a Monetary Policy Tool: Considerations for the Current Economic Environment" before the Money Marketeers of New York University, in New York.</p><p>Headlines via Reuters:</p><ul><li> 'sizable' rate hikes should remain on table if do not see signs inflation is moving down</li><li>Fully supported Fed's 75-bps rate hikes</li><li>If inflation starts to decline, slower pace of rate increases would be appropriate</li><li>'not yet clear' how high rate will need to go</li><li>Inflation much too high, must bring it down</li><li>Fed funds rate will need to rise to restrictive level, remain there 'for some time'</li><li>Not yet clear how much time before inflation moves down in 'consistent,' 'lasting' way</li><li>Significant uncertainty on inflation outlook makes it challenging to provide precise guidance on path of rates</li><li>Outlook for inflation, economic activity has 'significant two-sided risks'</li><li>High uncertainty puts a premium on flexibility</li><li>Should limit explicit forward guidance to when rates are near zero and inflation subdued</li><li>Benefits of explicit forward guidance lower, risks are higher now than in years following the 2008 crisis</li><li>Should communicate unwavering resolve to restore price stability, decide policy meeting-by-meeting, stay attentive to risks</li></ul><p>Nothing much to set Bowman apart from most of her Federal Open Market Committee (FOMC) colleagues here. Bowman is acknowledging data-dependence to guide the rate-hike path ahead. </p><p>Earlier posts:</p><ul><li><a href="https://www.forexlive.com/centralbank/td-forecasts-75bp-fed-rate-hike-in-november-50-in-december-terminal-5-by-march-2023-20221012/" rel="follow" target="_self" class="vertical-align-baseline">TD forecasts +75bp Fed rate hike in November, +50 in December. Terminal 5% by March 2023</a></li></ul><ul><li><a href="https://www.forexlive.com/centralbank/jp-morgan-forecast-feds-upper-band-of-target-range-to-475-and-stay-there-through-2023-20221012/" target="_blank" data-article-link="true" class="article-link">JP Morgan forecast Fed's upper band of target range to 4.75%, and stay there through 2023</a></li></ul><p>Fed funds</p>

                This article was written by Eamonn Sheridan at forexlive.com.

Source: Fed's Bowman: Sizable rate hikes should remain on table if inflation not seen moving down

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