Federal Reserve officials have suggested that the central bank could raise its key interest rate by half a percentage point at a meeting of the Federal Open Market Committee on May 3-4.
Aggressive action would now help the central bank curb excess demand, many Fed officials said, although some observers worried the labor market could suffer and a recession could occur.
While a number of central bankers have expressed support for a rise half a percentage point higher, even the most Fed-minded officials do not see the need for a higher rise in interest rates.
Here is a summary of the latest comments from central bankers.
Chairman Jerome Powell (International Monetary Fund panel on April 21)
“I think it’s appropriate to move a little faster, and I also think there’s something in the idea of front-end charging, no matter what you think, so it’s pointing in the direction of 50 basis points. the table. Of course, we make these decisions at the meeting and we will make them meeting by meeting, but I would say that 50 basis points will be on the table for the meeting in May.
Governor Lael Brainard (WSJ interview on April 12)
“As for what exactly is the right pace of this set of interest rate meetings, I do not want to just focus on that, but I would just say that the combined effect will bring the political position to a more neutral position. later this year.
Gov. Christopher Waller (April 13, CNBC)
“I prefer a front-loading approach, so an increase of 50 basis points in May would be in line with that, and probably more in June and July.
New York Fed President John Williams (April 14, Bloomberg TV)
Raising the interest rate in May by 50 basis points is “a very reasonable option … From the point of view of monetary policy, it makes sense to move expeditiously to more normal levels of interest rates on federal funds.”
Cleveland Fed President Loretta Mester (April 22, CNBC)
“I would support at this point, given where the economy is, an increase of 50 basis points in May and a few more to reach those two and a half percent.[point] level by the end of the year. “
Fed President in St. Louis James Bullard (virtual appearance on April 18)
“Not all hope is lost here. I think we are in a position where we can maintain confidence and reduce inflation, “but when it comes to raising interest rates by 75 basis points in May, this action is” not my main case. “
Kansas City Fed President Esther George (virtual appearance on March 30)
“Given the state of the economy, with inflation peaking at 40 and a level of unemployment close to record lows, a rapid transition to neutral policy is appropriate.
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