Another 75 bps rate hike will be appropriate in July

Federal Reserve Governor Michelle Bowman said on Thursday another 75 basis points (bps) rate increase in July and at least 50 bps of hikes at the next few meetings would be appropriate, as reported by Reuters.

Additional takeaways

“Further rate hikes may be needed after that, depending on how economy evolves.”

“I am committed to a policy that will bring real federal funds rate back into positive territory.”

“With inflation unacceptably high, it doesn’t make sense to have nominal fed funds rate below near-term inflation expectations.”

“Our number one responsibility is to reduce inflation.”

“Labor market will remain strong as rates rise, though actions are not without risk.”

“Makes sense to eventually sell Fed’s MBS holdings.”

“My longer-term goal is to get Fed out of indirectly intervening in the real estate market.”

“I strongly supported Fed’s June rate hike.”

“Inflation has shown little sign of moderating.”

“Labor market tightness is contributing to inflation.”

“Labor shortages will likely persist in many sectors.”

“Inflation at these levels threatens sustained job growth, overall health of the economy.”

“Little prospect of inflationary effects of Ukraine invasion abating soon.”

“Global supply chain issues continue as China COVID lockdowns slow production, shipping.”

“We need to use tools to address inflation before expectations become entrenched.”

Market reaction

The US Dollar Index showed no immediate reaction to these comments and was last seen posting small daily gains at 104.25.

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