Chairman says it’s clear the Fed needs to raise rates “a lot more” in the US

New York’s Federal Reserve (Federal, US central bank) President John Williams said this Tuesday, 30, that it is “clear” that the US central bank will have to raise key interest rates “much more”. At the end of the year. In a question and answer session Wall Street JournalThe official said that it is necessary to reach the territory of containment policy to control the demand which has never happened in the US.

Williams said interest rates should remain “slightly above” the 3.5% mark, with the power to vote on monetary decisions.

He noted that the real interest rate would need to be above zero to bring demand back into balance with supply. “I’m very focused on data related to inflation and inflationary pressures,” he said. “My hope is that supply disruptions will ease somewhat next year.”

According to Williams, the latest inflation reading is encouraging but still at very high levels. “In general, the current situation is very similar to July.”

2023

The Fed official also predicted that key interest rates in the US would need to rise further in 2023. “I believe we should raise rates and keep them next year,” he said.

Asked about the possibility of a rate cut next year, Williams said it depends on the data, but he sees “the need to keep rates high for some time.”

on Trade Between controlling inflation and its impact on economic growth, the relative choices will be more difficult in the short run, but not necessarily in the long run, the official said.

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