(Bloomberg) -- Federal Reserve Governor Michelle Bowman reiterated her view that the US central bank may need to raise rates further in order to fully restore price stability.
“I supported raising the federal funds rate at our July meeting, and I expect that additional increases will likely be needed to lower inflation to the FOMC’s goal,” Bowman said, referring to the Federal Open Market Committee in remarks prepared for a central bank Fed Listens event in Atlanta.
She added that further moves will depend on the incoming economic data, repeating her view made to the Kansas Bankers Association in Colorado on Saturday.
“I will be looking for evidence that inflation is on a consistent and meaningful downward path as I consider whether further increases in the federal funds rate will be needed, and how long the federal funds rate will need to remain at a sufficiently restrictive level,” she said.
The Fed’s July rate hike brought the federal funds rate to a range of 5.25% to 5.5%, the highest level in 22 years. The median estimate of Fed officials’ most recent quarterly projections, published in June, showed two more rate increases this year, the first of which was accomplished with last month’s hike.
“We have made progress in lowering inflation over the past year, but inflation is still significantly above the FOMC’s 2% target, and the labor market continues to be tight, with job openings still far exceeding the number of available workers,” Bowman said.
On Friday, a Bureau of Labor Statistics report showed nonfarm payrolls increased 187,000 last month — less than forecast — while the unemployment rate unexpectedly dropped to 3.5%, one of the lowest readings in decades.
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