Experts are divided on whether the US Federal Reserve should raise its interest rate target to 3% to combat inflation and cushion against recessions, with some arguing that raising inflation targets would be futile.
Two Federal Reserve officials suggest that interest-rate increases may be coming to an end, but one of them believes that further hikes may still be necessary depending on inflation trends.
Federal Reserve Bank of Philadelphia President Patrick Harker does not believe that the U.S. central bank will need to increase interest rates again and suggests holding steady to see how the economy responds, stating that the current restrictive stance should bring inflation down.
Two officials at the Federal Reserve have expressed differing views on whether or not the central bank should raise its benchmark interest rate again to combat inflation, highlighting the uncertainty surrounding future rate hikes, with more clarity expected from Federal Reserve Chair Jerome Powell's upcoming speech at a Fed conference in Jackson Hole.
Federal Reserve Chair Jerome Powell stated that the strength of the U.S. economy may require further interest rate hikes to reduce inflation, despite uncertainties surrounding the economic outlook.
The president of the Federal Reserve Bank of Philadelphia believes that the US central bank has already raised interest rates enough to bring inflation down to pre-pandemic levels of around 2%.
President of the European Central Bank, Christine Lagarde, stated that interest rates in the European Union will need to remain high to combat inflation, despite progress being made, emphasizing the challenges posed by disruptions in the global and European economies.
The European Central Bank (ECB) will maintain high interest rates for as long as necessary to combat persistent inflation, according to ECB President Christine Lagarde, amid efforts to manage a stagnating economy; however, the ECB is also considering longer-term economic changes that may contribute to sustained inflation pressures.
Cleveland Federal Reserve Bank President Loretta Mester believes that beating inflation will likely require one more interest-rate hike in the U.S. and then pausing for a while, although she may reassess her previous view of rate cuts starting in late 2024, and she aims to set policy so that inflation reaches the Fed's 2% goal by the end of 2025 to prevent further economic harm.
The Bank of England may have to increase interest rates if the US Federal Reserve decides to raise rates to cut inflation, in order to prevent the pound from weakening and inflation from rising further.
The former president of the Boston Fed suggests that the Federal Reserve can stop raising interest rates if the labor market and economic growth continue to slow at the current pace.
The Federal Reserve's preferred inflation gauge increased slightly in July, suggesting that the fight against inflation may be challenging, but the absence of worse news indicates that officials are likely to maintain interest rates.
The Federal Reserve is considering whether to raise the key interest rate even higher to combat inflation, but some members, like Raphael Bostic, believe it's unnecessary and recommend keeping the rate at its current level for an extended period. Bostic also emphasizes the strength and resilience of businesses and families, and the need to maintain a restrictive stance on interest rates to achieve the 2% inflation target.
Boston Federal Reserve President Susan Collins advocates a patient approach to policymaking and believes that more evidence is needed to determine if inflation has been tamed, stating that the Fed may be "near or even at the peak" for interest rates but further increases could be necessary depending on data outcomes.
Bank of Canada Governor Tiff Macklem suggests that interest rates may not be high enough to bring inflation back down to target, emphasizing the need for further restrictive monetary policy to restore price stability.
Bond traders are anticipating that the Federal Reserve will continue with interest-rate hikes, and next week's consumer-price index report will provide further insight on how much more tightening may be required to control inflation.
Rising energy costs are predicted to contribute to an increase in inflation rate, but it is unlikely to prompt the Federal Reserve to raise interest rates, though there may be another rate hike in the future.
The latest reading of inflation suggests that interest rates may start to normalize soon, with economists discussing the need for rates to be high enough to control inflation without causing damage to the economy. The key is to maintain long durations at current levels of inflation and interest rates with no surprises.
Economist Campbell Harvey warns that the Federal Reserve should not raise rates later this year, as he believes a recession may occur in 2024 due to an inverted yield curve and potential distortions in Bureau of Labor Statistics and GDP figures.
New research suggests that elevated interest rates may not have been the main cause of the decline in inflation, sparking a debate about whether the Federal Reserve needs to raise rates again.
A survey conducted by Bloomberg shows that most economists expect the Federal Reserve to hold interest rates steady until May and project one additional rate increase this year, although they do not believe the Fed will actually implement another increase.
The Federal Reserve is expected to hold off on raising interest rates, but consumers are still feeling the impact of previous hikes, with credit card rates topping 20%, mortgage rates above 7%, and auto loan rates exceeding 7%.
The Federal Reserve faces the challenge of bringing down inflation to its target of 2 percent, with differing opinions on whether they will continue to raise interest rates or pause due to weakening economic indicators such as drops in mortgage rates and auto sales.
The Federal Reserve is expected to keep interest rates steady and signal that it is done raising rates for this economic cycle, as the bond market indicates that inflation trends are moving in the right direction.
The U.S. Federal Reserve kept interest rates steady but left room for potential rate hikes, as they see progress in fighting inflation and aim to bring it down to the target level of 2 percent; however, officials projected a higher growth rate of 2.1 percent for this year and suggested that core inflation will hit 3.7 percent this year before falling in 2024 and reaching the target range by 2026.
The Federal Reserve has indicated that interest rates will remain "higher for longer," potentially for at least three more years, in order to sustain economic growth and combat inflation.
Central banks, including the US Federal Reserve, European Central Bank, and Bank of England, have pledged to maintain higher interest rates for an extended period to combat inflation and achieve global economic stability, despite concerns about the strength of the Chinese economy and geopolitical tensions.
The Federal Reserve is paying attention to "real" interest rates, which measures rates adjusted for inflation, and is using this to inform its decisions regarding future rate hikes and inflation.
Federal Reserve policymakers Governor Michelle Bowman and Boston Fed President Susan Collins expressed the need to keep interest rates elevated to combat inflation, with Bowman suggesting further rate hikes will likely be needed to bring inflation down to the Fed's 2% target and Collins stating that further tightening is not off the table as progress in battling inflation has been slow.
Two former Federal Reserve policymakers disagree on whether the central bank should raise interest rates, with one saying rates have likely peaked and the other saying they need to be raised further, but both agree that achieving a soft landing for the economy is unlikely.
