Another Federal Reserve official talked the interest rate increase talk today. Federal Reserve Vice Chair Lael Brainard told CNBC that expectations for half-percentage-point increases in interest rates this month and next were reasonable, and that she saw no case for pausing the central bank’s tightening campaign afterward.
“From where I sit today, market pricing for 50 basis points, potentially in June and July, from the data we have in hand today, seems like a reasonable path,” Brainard said. “Right now it’s very hard to see the case for a pause. We’ve still got a lot of work to do to get inflation down to our 2% target.”
U.S. central bankers raised rates by half a percentage point last month and signaled they’ll do so again at the next two meetings as they try to tamp down the hottest inflation in decades. Since then, Atlanta Fed chief Raphael Bostic has suggested a pause in September might make “sense.” But Brainard’s comment made clear that his was a minority opinion.
“My sense is that there’s virtually no support for that, outside of Bostic,” Stephen Stanley, chief economist at Amherst Pierpont Securities, told Bloomberg. “It seems like there’s an unusual degree of consensus on the committee right now–which is not surprising because the course of action, at least in the short run, is pretty obvious.”
“I am going to be looking to see a consistent string of decelerating monthly prints on core inflation before I’m going to feel more confident,” Brainard said. “We’re certainly going to do what is necessary to bring inflation back down. That is our number one challenge.”
