Two Federal Reserve officials made the case on Tuesday for ongoing interest rate increases to combat inflation, but said uncertainty over the economic outlook makes it hard to say how aggressive the central bank will need to be. Federal Reserve Bank of Chicago President Charles Evans said in an appearance in New York that he sees the federal-funds target rate reaching around 2.25% to 2.50% by the end of the year, which could include a couple of half percentage point increases. Speaking on CNBC, Atlanta Fed leader Raphael Bostic said it is important for the Fed to get to a neutral funds rate “in an expeditious way.” … Mr. Evans said he doubts the Fed would need to increase rates by more than 50 basis points in a single shot. On Monday, St. Louis Fed President James Bullard, an FOMC voter and one of the earliest supporters of raising rates aggressively to get inflation under control, said he can’t rule out an increase of 75 basis points, though he doesn’t expect one of that magnitude. Mr. Bostic also cast doubt on the need for a 75 basis point rate increase, saying that “any action is actually possible, although it’s not something that’s really on my radar right now.” Mr. Bostic said he sees the fed-funds rate at around 1.75% at year-end, which is lower than what many other Fed officials view as likely.
Source: Wall Street Journal
