Signs of a rapidly deteriorating US economic outlook have spurred bond traders to pencil in a complete policy turnaround by the Federal Reserve in the coming year, with interest-rate cuts in the middle of 2023.
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.
US economic growth looks to have downshifted in recent weeks in the face of headwinds that include rising interest rates and inflation, the Federal Reserve said.
Federal Reserve officials face pressure for more aggressive action after a hotter-than-expected inflation reading for April, though so far officials are sticking with their strategy to keep raising interest rates by a half point at each of their next two meetings.
The Federal Reserve should raise interest rates to the neutral range as quickly as possible and can move above that should price pressures persist, Richmond Fed President Thomas Barkin said.