A top Federal Reserve official has backed more interest rate rises if inflation sticks at its current level, saying immigration and aggressive fiscal stimulus are likely keep US prices rising more quickly than in other rich economies. Michelle Bowman, one of the Fed’s governors and a voter on its rate-setting Federal Open Market Committee, said she remained “willing to raise” borrowing costs again “should progress on inflation stall or even reverse”.
Another seven expect just one quarter-point cut, potentially pushing a decision back to the Fed’s final meeting of the year in December. The remaining eight members think two cuts are likely, with several members of the committee saying over the past week there were signs the US economy was weakening and price pressures dissipating. Investors are still betting that the Fed will cut by a quarter-point in mid-September, the central bank’s final meeting before the election.