Federal Reserve officials on Wednesday said they still aren't convinced the worst of the U.S. inflation scare has passed, in comments that teed up a continuation of the central bank's aggressive interest rate increases.
"We are in this for as long as it takes to get inflation down," Fed Vice Chair Lael Brainard said in an address to a banking conference, echoing past comments by officials from other central banks to do "whatever it takes" to protect their economies.
Policymakers on Wednesday shied from tipping their hand on that decision. Investors currently expect the larger rate hike to prevail at this point, though monthly inflation data due next Tuesday may influence that outlook. Those who spoke on Wednesday noted that even as the economy slows overall, the job market remains by some measures historically tight, and data have provided little sense of relief yet from rising prices.
But overall "most contacts expected price pressures to persist at least through the end of the year," the Fed said in its report.While Brainard, who spoke to the annual conference of The Clearing House and Bank Policy Institute, noted that the risks to growth and jobs may at some point weigh more heavily on the Fed's deliberations, she said the lesson from past bouts of inflation was clear: Don't pull back on rate increases too soon.
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