A US Federal Reserve official said Monday she expected high inflation through at least the first half of 2022 and therefore backs an interest rate hike in March, though by how much would depend on data, according to news.
"I support raising the federal funds rate at our next meeting in March," governor Michelle Bowman said, stressing that should the economy evolve as she expects, "additional rate increases will be appropriate in the coming months," the report said.
She did not specify how big a hike she expects at this point.
Inflation soared over the past year at its highest rate in four decades, hammering American consumers, wiping out pay raises and reinforcing the Federal Reserve's decision to begin raising borrowing rates across the economy.
The Labor Department said Thursday that consumer prices jumped 7.5per cent last month compared with a year earlier, the steepest year-over-year increase since February 1982.
When measured from December to January, inflation was 0.6 percent, the same as the previous month and more than economists had expected. Prices rose 0.7 percent from October to November and 0.9 percent from September to October.
Shortages of supplies and workers, heavy doses of federal aid, ultra-low interest rates and robust consumer spending combined to send inflation leaping in the past year. And there are few signs that it will slow significantly anytime soon.
Wages are rising at the fastest pace in at least 20 years, which can pressure companies to raise prices to cover higher labor costs. Ports and warehouses are overwhelmed, with hundreds of workers at the ports of Los Angeles and Long Beach, the nation's busiest, out sick last month. Many products and parts remain in short supply as a result.
The latest inflation data suggested to some economists that the Fed could raise its key rate in March by one-half a percentage point, rather than its typical quarter-point hike.
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