According to statements Thursday from two policymakers, the Federal Reserve is likely to raise its interest rate in July and September even if the economy slows.
The governor of the Fed believes that increases are necessary if the institution is to meet its duties and the market's expectations.
After the 50 basis point hike in September, we can debate if we should go back to 25s or not. We have to do more if inflation doesn't come down.
The Fed raised its benchmark borrowing rate by 75 basis points in June, the biggest increase in 20 years.
Markets expect the fed funds rate to keep increasing until it reaches a range of 3%- 4% by the end of the year. Inflation is at its highest level since 1981 as a result of the increases.
The higher the tax, the less economic activity there is. Inflation alone can place us in a bad economic outcome down the road if we don't get it under control.
St. Louis Fed President James Bullard said in a separate appearance that he thinks the best approach is to act quickly and evaluate the impact of the hikes.
The Federal Open Market Committee voting member said it would be a good idea to go with the 75. We can see where we are and see how inflation develops when we get to 3.5%.
Both officials agree that recession fears are overblown and that the Fed needs to take a risk to get inflation under control.
Inflation is going to be brought down. That means we are going to be aggressive on rate hikes and we may have to take the risk of causing economic damage, but I don't think that should be that much."
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