US policymakers continue to maintain a hawkish stance. The Federal Reserve has been raising interest rates month after month. Despite being in the midst of a banking crisis, the FED raised rates by 25 basis points last month. This brought the policy benchmark to the target range of 4.75% to 5%.
One central bank official has called for a rate hike. According to Federal Reserve Bank of Cleveland President Loretta Mester, policymakers should raise the benchmark interest rate above 5% this year. In fact, the official further suggested that the FED should keep rates there for some time to curb inflation.
“Precisely how much higher the federal funds rate will need to go from here and for how long policy will need to remain restrictive will depend on how much inflation and inflation expectations are moving down, and that will depend on how much demand is slowing, supply challenges are being resolved, and price pressures are easing,” she said.
At the Federal Open Market Committee meeting, officials also penciled in a single additional rate rise for the year, as officials continue to boost the cost of short-term borrowing in a bid to lower inflation.
