Fed’s Barkin says rate increases need to continue until inflation holds at 2%

Despite positive inflation data this week, the president of the Federal Reserve said Friday that more interest rate increases are necessary.

Barkin told CNBC's "Squawk on the Street" that releases this week showing that consumer and wholesale price increases softened in July were very welcome.

He said that they were happy to see inflation start to go down. He said that he would like to see a period of sustained inflation under control, and that they would have to keep moving rates into restrictive territory.

Consumer prices were flat in July while producer prices fell.

The consumer price index and producer price index were both up on a year-over-year basis. Barkin said the central bank needs to keep pushing until it reaches its goal.

He said that he would like to see inflation run at 2% at the PCE. The personal consumption expenditures price index is used by the Fed as its preferred gauge of the price of goods and services.

Barkin is the most recent Fed official to speak about rates.

At each of the last two meetings, the central bank hiked its borrowing rate. The markets are divided over whether the Fed will increase by three-quarters of a point in September or scale down to half a point.

Barkin believes acting aggressively now is important. He said his people are worried about inflation and want the Fed to act.

"Consumers really dislike inflation, and one message that I get loud and clear as I wander around my district is, 'we don't like inflation.'"