Michelle Bowman, a member of the Board of Governors of the US Federal Reserve System, said that despite the fact that inflation in the US is slowing down, there is still a need to further increase the base interest rate. «We are still far from achieving price stability, and I believe that we need to continue tightening monetary policy in order to return inflation to the target,» Bowman said at a conference of the Association of American Bankers. At the same time, the politician did not rule out that such actions could limit economic activity and weaken the labor market somewhat. Today, employers are raising salaries in order to attract and retain employees in a tough labor market. And this puts upward pressure on the dynamics of consumer prices, even when other components of inflation become more moderate due to the improvement of the situation in supply chains. Today we should pay attention to the January inflation data. Analysts predict that consumer prices in the States rose by 6.2% year-on-year last month, compared with 6.5% in December. It is worth noting that inflation has already slowed significantly from June's 9.1%, but it is still far from the Fed's 2% target. Bowman also said that further rate decisions will be made taking into account consistent evidence of slowing inflation, as well as economic and geopolitical events. In general, since March 2022, the Federal Reserve has raised the base interest rate by 4.5 percentage points to 4.5–4.75% per annum. The rate of increase has been the highest since the early 1980s.
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