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Fed confirms interest rate hikes to combat inflation
Three officials from the U.S. Federal Reserve stated that raising interest rates is now essential to curb inflation, which has remained above 2% for over five years, aiming to reduce economic activity and lessen inflationary pressures. Cleveland Fed President, Loretta Mester, emphasized that the economy can withstand higher interest rates, while Minneapolis Fed President, Neel Kashkari, believed that a gradual rate hike helps manage inflation effectively. Dallas Fed President, Lorie Logan, supported increasing rates by a quarter percentage point, underscoring that inflation will not return to the target without intervention and deliberate policies, with a watchful eye on future data. The vote to hold interest rates unchanged was 9 to 3, as the monetary policy begins to tighten in an effort to control persistent inflation.
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