On Saturday, Federal Reserve Governor Michelle Bowman reiterated her view that U.S. inflation remains too high despite "considerable" progress in bringing it down, and the central bank may need to tighten monetary policy further.
"I expect it will likely be appropriate for the (Fed) to raise rates further and keep them at restrictive levels for some time to bring inflation back to its 2 percent objective in a timely manner." Bowman said in a prepared speech.
"I remain willing to support an increase in the federal funds rate at future meetings if incoming data suggest that inflation is stagnating or too slow to bring inflation down to 2 percent in a timely manner." 'she said.
Bowman repeated her warning that "high energy prices could reverse some of the progress we have made on inflation in recent months."
Bowman, one of the Fed's most hawkish policymakers, said the latest jobs report reflected "solid" job growth.
Just two days ago, the Labor Department reported that U.S. nonfarm payrolls rose 336,000 in September, sharply higher than the 170,000 expected and well above the 187,000 in August. The U.S. unemployment rate held at 3.8 percent in September, while wages grew at a modest pace. The Labor Department also made significant upward revisions to July and August employment figures.
A surge in US employment in September has bolstered the case for the Federal Reserve to raise interest rates again. Bowman said the Fed expects inflation to remain above target through at least the end of 2025, based on the median forecast released after the Fed's September policy meeting.
Bowman's comments were largely the same as those she made on Monday on the outlook for the economy and policy.
"I continue to expect that further rate increases may be needed to bring inflation back to 2 per cent in time," Mr Bowman said at an event in Canada on Monday. "There is an ongoing risk that high energy prices could reverse some of the progress we have made on inflation in recent months."
Fed officials last month left the target range for their benchmark interest rate unchanged at 5.25% to 5.5%, the highest level in 22 years. Forecasts released at the same time showed that 12 of 19 policymakers expect one more rate hike this year, and officials expect fewer cuts in 2024 than previously thought.