(Reuters) – Richmond Federal Reserve Bank President Thomas Barkin on Monday said he supports moving to smaller interest-rate hikes within the central bank’s fight to bring down too-high inflation.
“I’m very supportive of the trail that’s slower, probably longer and potentially higher,” Barkin said in an interview with Bloomberg TV, though he declined to say how high he believes rates might want to go, saying the Fed will do “what we want to do” to ease price pressures.
“You obviously don’t need to do damage you do not have to do. But the main focus is on inflation and getting inflation under control.”
The Fed has raised borrowing costs faster this 12 months than at any time for the reason that early Nineteen Eighties, using jumps of 75-basis-points at each of the last 4 meetings to bring the policy rate to its current 3.75%-4% range.
Policymakers have signaled they might move more slowly starting at their meeting next month, at the same time as some including Fed Chair Jerome Powell have signaled rates of interest may ultimately have to go higher than the 4.6% median that Fed policymakers had thought in September can be adequate to cut back inflation.
Barkin said he believes the Fed must make sure that to not stop raising rates too soon, and may save any talk of probably loosening policy until it is certain inflation is under control.
“It’s helpful to be somewhat more cautious as you are in restrictive territory because you understand, what you are doing goes to affect things somewhere out in the long run,” he said.
“That is different than not moving; I just think it’s a greater risk management approach to maneuver somewhat slower as you collect the info.”
Asked if he could envision the Fed keeping rates high into 2024, a possibility raised by St. Louis Fed President James Bullard earlier within the day, Barkin said he could. “It depends quite a bit on what we’re seeing on the inflation side,” he said.
(Reporting by Ann Saphir; Editing by Chris Reese)
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