**Federal Reserve Governor Raises Concern about Inflation**
Federal Reserve Governor Michelle Bowman has expressed her belief that the US central bank may need to raise interest rates further to achieve price stability. In her remarks at an event with the Kansas Bankers Association, Bowman stated that additional rate increases would likely be necessary in order to bring inflation down to the Federal Open Market Committee’s (FOMC) target of 2%.
**Support for Previous Rate Hike**
Bowman also affirmed her support for the decision to raise rates at the Fed’s most recent meeting. However, she emphasized the need for consistent evidence that inflation is on a sustained downward trajectory before considering further rate increases. Bowman acknowledged the recent lower inflation reading as a positive sign but stressed the importance of a continuous decline towards the 2% goal. She also highlighted the significance of monitoring consumer spending and labor market conditions for signs of potential slowdown.
**Federal Reserve’s Rate Hike and Projections**
The Fed’s decision to raise rates in July brought the federal funds rate to 5.25% to 5.5%, the highest level in 22 years. The most recent projections by Fed officials indicated a possibility of two more rate increases in the year, with the first one already implemented through last month’s hike.
**Continued Assessment and Future Rate Increases**
Bowman emphasized the ongoing assessment of incoming data by policymakers and stressed the importance of raising rates if inflation progress stalls in the future. The Federal Reserve has three more policy meetings scheduled for 2023, with the next meeting taking place in September.
**Nonfarm Payrolls Increase, Unemployment Rate Drops Unexpectedly**
A recent report from the Bureau of Labor Statistics revealed that nonfarm payrolls increased by 187,000 last month. This figure fell below expectations, but the unemployment rate unexpectedly dropped to 3.5%, which is one of the lowest readings in decades.
**Views of Fed Officials on Interest Rates**
Following the release of the jobs data, two Fed officials expressed their views on the need for interest rate adjustments. They argued that slower US employment gains suggest a more balanced labor market, indicating that the central bank may need to consider how long to maintain interest rates at elevated levels.
**Atlanta Fed President’s Perspective**
Atlanta Fed President Raphael Bostic expected the economy to slow down gradually, and the recent employment gains of 187,000 align with this expectation. Bostic expressed his comfort with the current pace and stated that he does not foresee the need for additional rate hikes in response to the slowdown.
**Chicago Fed President’s Insight**
Chicago Fed President Austan Goolsbee emphasized the need for patience throughout the disinflation process. He expressed hope that the central bank can bring inflation down to the target of 2% without triggering a recession. Goolsbee mentioned that policymakers will soon need to consider when to hold interest rates steady and for how long.