A top Federal Reserve official has reaffirmed his support for lifting interest rates further as an “insurance” policy against inflation, underscoring divisions that have emerged at the US central bank about monetary policy.
James Bullard, president of the Federal Reserve Bank of St Louis and one of the Fed’s foremost hawks, on Thursday said he would keep an “open mind” going into the next policy meeting in June but suggested he is inclined to back another rate rise after 10 successive increases since last year.
Another quarter-point increase would bring the benchmark federal funds rate to a new target range of 5.25-5.50 per cent, higher than most officials deemed necessary in March to curtail inflation and at odds with the pause that Fed chair Jay Powell and other policymakers have recently suggested at a time of great uncertainty.