Three Fed officials are hawkish: interest rates should remain high for longer

Three Fed officials said the central bank should keep interest rates high for longer as policymakers await more evidence of slowing inflation, suggesting officials are in no rush to cut rates.

Special Topic: Dividends expected to last long but need to be wary of short-term pullbacks Three Fed officials said the Fed should keep interest rates high for longer as policymakers await more evidence of slowing inflation. That suggests officials There is no rush to cut interest rates.
Cleveland Fed President Loretta Mester, New York Fed President John Williams and Richmond Fed President Thomas Barkin each said Thursday that inflation may take longer to reach the 2% target.
Upcoming economic information suggests it will take longer to gain that confidence, Mester said Thursday at an event in Wooster, Ohio. As our understanding of the path of inflation becomes clearer, we will maintain our restrictive stance more restrictive for now. It is prudent to take a long time.
Mester has a vote in decision-making this year.
She will step down when her term expires at the end of June.
She reiterated comments she made earlier this week, saying monetary policy was in a good place. It was too early to say inflation progress was stalling.
Williams made similar comments in a Reuters interview published on Thursday, saying he saw no reason to adjust monetary policy now.
He said: \”I don\’t expect to get the greater confidence that we need to see in the short term that inflation is moving towards the 2% target.\”
Barkin told CNBC on Thursday that demand needs to cool further for inflation to reach the Fed\’s target.
He noted that commodity inflation has fallen sharply as supply chains have been repaired.
\”In order to get to 2% sustainably in the right way, I think it will take some time,\” said Barkin, who also has a vote in decision-making this year.
Mester said Wednesday\’s price report showed a welcome decline in inflation from the previous month. But she and other central bank officials said they wanted to see more data to be confident that inflation is moving toward the Fed\’s 2% target.
Officials earlier this month kept the benchmark interest rate unchanged at a range of 5.25%-5.5%.
Federal Reserve Chairman Jerome Powell said on Tuesday that officials will need to be patient and let restrictive policies take effect.
Barkin echoed that sentiment, noting that the Fed needs to keep borrowing costs high for longer to ensure inflation returns to target.
The next meeting of Fed policymakers will be held on June 11-12.

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