A senior Federal Reserve official has called for the US central bank’s main interest rate to rise to a level at which it starts to stunt economic growth by the end of the year, brushing off concerns that a sharp monetary tightening would hurt the labour market.
In a speech at Goethe University in Frankfurt, Germany on Monday, Christopher Waller, a Fed governor, said he backed increasing interest rates by another 50 basis points “for several meetings” and would not stop that pace “until I see inflation coming down closer to our 2 per cent target”.
“By the end of this year, I support having the policy rate at a level above neutral so that it is reducing demand for products and labour, bringing it more in line with supply and thus helping rein in inflation,” Waller said.