The Reasons the Fed’s Bowman is “Willing” to Hike Rates if “Data Indicate Progress On Inflation Has Stalled or Reversed”

by Wolf Richter
Wolf Street

She nails it with her list of inflation-fueling factors. It parallels what Powell said more softly at the press conference.

The first three months of the year have produced a nasty re-acceleration of inflation in the US. It was across the board: in the Consumer Price Index, in the Fed-favored PCE price index, in the Producer Price Index, in the quarterly Employment Cost Index (for two quarters in a row). The Fed is beginning to adjust to this new scenario, and a rate hike — instead of rate cuts — is now back on the table and keeps getting talked about.

Even – or especially? – after looking at the results of the jobs report on Friday, Fed Governor Michelle Bowman said in a speech that she remains “willing to raise the federal funds rate at a future meeting should the incoming data indicate that progress on inflation has stalled or reversed.” This parallels what Powell said more softly at the FOMC post-meeting press conference. No disagreement there.

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