The United States Federal Reserve will likely need to keep interest rates higher for longer in order to firmly bring down inflation, a senior Fed official said on Monday .
Higher rates lower inflation by raising the cost of borrowing, which can cause financial pain for consumers with mortgages and outstanding loans. "The most important question at this point is not whether an additional rate increase is needed this year or not, but rather how long we will need to hold rates at a sufficiently restrictive level to achieve our goals," Fed Vice Chair for Supervision Michael Barr told a conference in New York in prepared remarks.
Mr Barr's comments echo the views of the majority of his colleagues, who recently lowered the number of rate cuts they expect in 2024, suggesting a longer period of high rates.