Fed Officials Keep Up Hawkish Calls for Further Rate Increases

Federal Reserve officials stressed the need to keep raising interest rates, including the potential for borrowing costs to peak at a higher level than previously expected amid ongoing price pressures.

Four policymakers speaking at separate events Wednesday delivered a similar message — welcoming a recent moderation in inflation while cautioning that the fight was not yet won.

Their hawkish comments, following remarks Tuesday by Chair Jerome Powell, come as investors reassess bets on how high the Fed will raise rates, with some wagering the peak could reach 6% following a red-hot January employment report. They currently stand at 4.6%.

“We need to attain a sufficiently restrictive stance of policy,” New York Fed President John Williams told a Wall Street Journal live event in New York. “We’re going to need to maintain that for a few years to make sure we get inflation to 2%.”

Policymakers increased their benchmark rate by a quarter percentage point to a range of 4.5% to 4.75% last week. The smaller move followed a half-point increase in December and four jumbo-sized 75 basis-point hikes prior to that.

Officials in December penciled in a median projection of 5.1% for rates this year, implying a couple more quarter-point hikes.