Fed officials forecast additional rate hikes in effort to curb inflation
Yahoo Finance Fed reporter Jennifer Schonberger breaks down the latest comments from the Federal Reserve regarding rate hikes and inflation.
DAVE BRIGGS: A chorus of Fed members speaking today on the outlook for the economy and inflation. Here's our very own Jen Schonberger with the roundup. Hi there, Jen.
JENNIFER SCHONBERGER: Hi, Dave. That's right. Three members of the Federal Reserve pointing to strength in the job market supporting inflation in the services economy now, requiring the Fed to continue raising rates and remain steadfast in keeping interest rates high. Fed Governor Chris Waller, Minneapolis Fed President Neel Kashkari, and New York Fed President John Williams all noting that wage growth is still well above levels consistent with the Fed's 2% inflation target, pointing to continued inflation in the services sector, excluding housing.
Kashkari noted that wage growth closer to 3% would be more consistent with 2% inflation, and Fed governor Waller says while some think inflation will drop quickly this year, he's not seeing signs of that. And he's bracing for a, quote, "longer fight to get inflation down to our 2% target."
The key, says New York Fed's Williams, is to raise rates to levels that will restrict growth and keep them there for a few years to continue restraining growth. Speaking at a Wall Street Journal event, Williams said raising the Fed funds rate this year to between 5% and 5 and 1/4%, which is what was penciled in December, is, quote, "very reasonable" for a rate hike path this year.
Now, Williams noted that future rate hikes of a quarter percentage point in size, quote, "seemed like the right size, but ultimately, it will depend on the data." Williams also said that if financial conditions loosen, that would cause the Fed to raise rates higher. Guys.
SEANA SMITH: All right, Jen Schonberger, great stuff. Thanks so much.