Two Federal Reserve officials on Friday added to a chorus of U.S. central bankers this week in signaling that interest rates will need to go higher in order to successfully quash inflation, although one guarded against inferring too much from recent unexpectedly-strong economic data.
Thomas Barkin also said
"Moving inflation back to target will require more rate increases," Barkin told reporters following an event in Rosslyn, Virginia. "How many of those I think we'll have to see ... what you see is progress, but slow progress, you don't see victory." Futures tied to the Fed's policy rate show traders now expect the central bank to raise interest rates another 75 basis points by the summer, bringing the benchmark rate to a 5.25%-5.5% range. A little over a week ago, financial markets did not expect the Fed policy rate to exceed 5%.
That said, Barkin warned against reading too much into the stellar job gains and robust retail sales figures reported in recent days.
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