Fed’s Bowman Backs Raising Rates 75 Basis Points in July

Federal Reserve Governor Michelle Bowman said she supports raising interest rates by 75 basis points again in July and following that with a few more half-point hikes.

The hawkish remarks Thursday come roughly a week after the central bank delivered the largest rate increase since 1994. Fed officials are sending a strong signal that they will do what is needed to rein in soaring inflation, while acknowledging that it’s becoming more challenging for them to achieve a soft landing on the economy.

“Based on current inflation readings, I expect that an additional rate increase of 75 basis points will be appropriate at our next meeting as well as increases of at least 50 basis points in the next few subsequent meetings, as long as the incoming data support them,” Bowman said in prepared remarks for an event organized by the Massachusetts Bankers Association. “Depending on how the economy evolves, further increases in the target range for the federal funds rate may be needed after that.”

The Fed’s Open Market Committee raised interest rates by 75 basis points last week to a range of 1.5% to 1.75%. Fed Chair Jerome Powell told reporters after the meeting that another 75 basis-point increase, or a 50 basis-point move, was on the table next month. He was testifying Thursday on Capitol Hill for the second day of semiannual hearings on monetary policy, where he said the Fed’s commitment to fighting inflation was “unconditional.”