Will inflation persist in the US? Fed member explains...

According to a report by Bloomberg HT, Federal Reserve Board Governor Michelle Bowman stated that while inflation will likely remain elevated "for some time," they still anticipate that price increases will eventually slow down as interest rates are held at their current levels.

As the first Fed official to speak since Chair Jerome Powell's remarks on Wednesday, Bowman noted that recent inflation data suggests the low values seen at the end of 2023 were temporary.

'KEEPING INTEREST RATES STEADY WILL LOWER INFLATION'

Furthermore, stating that inflation will decline further as the policy rate is held steady, Bowman said, "However, I still see a number of upside risks to inflation that could affect the outlook." Bowman pointed out that future data will determine whether it is sufficient to return inflation to the 2 percent target.

On May 1, the Fed kept the policy rate unchanged in the 5.25-5.50 range, in line with market expectations. The decision statement also included messages from Fed officials indicating that the expected progress on inflation had not materialized.

News Source: 12punto