"Sizable increase" in interest rates on table if inflation remains elevated: US Fed's Bowman

New York [US], October 13 (ANI): The US Federal Reserve Governor Michelle W. Bowman said that "sizable increase" in the key interest rate would remain on the table if inflation continues to remain on the higher side.
"If we do not see signs that inflation is moving down, my view continues to be that sizable increases in the target range for the federal funds rate should remain on the table," Bowman said.
Bowman made the remarks at the Money Marketeers of New York University on Wednesday on a theme titled 'Forward Guidance as a Monetary Policy Tool: Considerations for the Current Economic Environment'.
However, she believes a slower pace of rate increases would be appropriate if and if inflation starts to decline.
"To bring inflation down in a consistent and lasting way, the federal funds rate will need to move up to a restrictive level and remain there for some time. However, it is not yet clear how high we will need to raise the federal funds rate and how much time will pass before we begin to see inflation moving back down in a consistent and lasting way," Bowman added.
On the inflation outlook, she said it remains "significantly uncertain".
"This uncertainty makes it very challenging to provide precise guidance on the path for the federal funds rate."
In the recently held monetary policy review meeting, the US Federal Reserve raised key interest rates in its continued fight against red-hot inflation.
The key policy rate was increased by 75 basis points to 3.0-3.25 per cent -- which was the third consecutive hike of the same magnitude.
Raising interest rates is a monetary policy instrument that typically helps suppress demand in the economy, thereby helping the inflation rate decline.
The US central bank seeks to achieve maximum employment and inflation at the rate of 2 per cent over the long run and it anticipates that the ongoing hikes in the target range would be appropriate.
Consumer inflation in the US though declined marginally in August to 8.3 per cent from 8.5 per cent in July but was way above the 2 per cent goal. Inflation data for September is due later today.
After the latest post-monetary policy held in the third week of September, US Fed Chair Jerome Powell too said restoring price stability will likely require maintaining a "restrictive" policy stance for some time and a historical record cautions strongly against prematurely loosening policy. (ANI)