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Fed’s Barr Says Rate Hike May Be Needed if Inflation Doesn’t Cool
Summary
- Federal Reserve Governor Michael Barr said a benchmark interest-rate increase may be needed if inflation does not slow sufficiently.
- Barr said the U.S. economy and labor market remain solid, but inflation is still too high, adding that he would prefer a rate hold if price pressures continue to ease.
- Barr added that investment related to artificial intelligence (AI) is supporting economic growth, but persistent inflation above target remains a key risk factor.
Federal Reserve Governor Michael Barr said interest-rate increases may be needed if inflation does not slow sufficiently.
Barr said the U.S. economy is growing solidly and the labor market remains stable, while inflation is still too high, according to Walter Bloomberg on September 1.
He said he would prefer to keep rates at current levels if price pressures continue to ease. But if inflation does not moderate soon, a rate hike will be needed.
Barr added that investment related to artificial intelligence is supporting economic growth, but inflation remaining above target is still a key risk.
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