By Ovunc Kutlu
ISTANBUL (AA) - US Federal Reserve Governor Michelle Bowman said Wednesday that interest rates may need to rise more to fight inflation.
"Domestic spending has continued at a strong pace, and the labor market remains tight," she said at the Reinventing Bretton Woods Committee and Policy Center for the New South Marrakech Economic Festival in Marrakech, Morocco
"This suggests that the policy rate may need to rise further and stay restrictive for some time to return inflation to the FOMC's goal," she added.
Bowman said there has been progress on lowering inflation since early 2022 but added that inflation remains well above the Federal Open Market Committee's (FOMC) target of 2%.
"Many central banks facing these dynamics have tightened monetary policy in an effort to bring demand and supply into better balance and to bring inflation back down to their targets," she noted.
"It is, therefore, necessary that central banks, in collaboration with other financial regulators as appropriate, develop and use supervisory and prudential regulatory tools to promote financial stability. Effective supervision and regulation, in turn, will support the effective conduct of monetary policy in achieving central banks' macroeconomic objectives," she added.
The Fed made 11 rate hikes since March 2022, raising the federal funds rate between the 5.25% - 5.5% target range -- the highest in 22 years.