ATFX - The Federal Reserve "flew" an eagle over the weekend! Bowman: Further rate hikes may be needed!

As non-farm payrolls cooled, Bowman hinted at the weekend that the Federal Reserve may need to raise interest rates further. Former US Treasury Secretary Summers also expressed concerns about inflation...

Fed Governor Bowman said that in order to fully restore price stability,The Federal Reserve may need to raise interest rates further to bring inflation back to its 2% target.

Bowman said in a speech on Saturday that sheSupport the Federal Reserve's decision to raise interest rates at last month's meetingAlthough data released since then have shown a slowdown in price growth, Bowman saidShe wants to see more evidence of persistent deflationShe said:

"The recent lower inflation numbers have been positive, but I will be looking for evidence that inflation is falling meaningfully towards our 2 per cent objective as I consider further rate hikes and how long the federal funds rate needs to remain at a restrictive level. I will also be watching for signs of a slowdown in consumer spending and signs of loosening labour market conditions."

The Fed chose to raise rates by 25 basis points in July, lifting the federal funds rate to a range of 5.25-5.5 per cent, its highest level in 22 years. The median of the latest quarterly forecasts released by Fed officials in June suggested there could be another rate hike this year.

Bowman said policymakers will evaluate the upcoming data.If inflation stalls, they should be willing to raise interest rates in the futureThe Federal Reserve has three policy meetings left in 2023, with the next meeting in September

On Friday, the Bureau of Labor Statistics reported that nonfarm payrolls rose by 187,000 last month, less than expected, while the unemployment rate unexpectedly fell to 3.5 percent, one of the lowest levels in decades.

After the release of the jobs data, two Federal Reserve officials said that the slowdown in U.S. job growth indicates that the labor market is getting better balanced.The Federal Reserve may soon need to consider how long to maintain interest rates at high levels。

Atlanta Fed President Robert Bostic said the economy is expected to slow down in a fairly orderly fashion, and the addition of 187,000 non-farm payrolls continues that pace. Bostic said of the slowdown,It indicates that there is no need for further interest rate hikes, he said:

"I don't think this will end anytime soon."

Chicago Federal Reserve President Goolsbee said in an interview,Policy makers need to be patient in the anti-inflation processHe said they would soon need to start thinking about when to keep interest rates steady and for how long to keep them at restrictive levels.

However, former US Treasury Secretary Summers believes that,After wages rose more than expected in July, he remains concerned about inflation surging againHe said last Friday:

"I don't think we can be confident that inflation won't pick up again at some point in the future, and that's my concern."