Economía

Fed governor opens door to half-point rate hike in March

Bowman’s comments came after several officials on Friday pushed back against the idea of a half-point increase in the Fed’s benchmark short-term interest rate. The Fed is looking to raise rates as inflation surged to 7.5 per cent in January, compared with a year earlier, the biggest increase in four decades

The debate over how quickly to raise interest rates is being closely watched by financial markets and also could have an impact on the broader United States economy. Many economists have said the Fed has moved too slowly in response to an unexpectedly persistent surge in prices, raising the risk that inflation could remain high. But if it raises rates too quickly, the Fed risks choking off growth and hiring

Federal Reserve Governor Michelle Bowman said on Monday that she was open to lifting interest rates by more than the traditional quarter-point at the central bank’s next meeting in March.

Bowman’s comments came after several officials on Friday pushed back against the idea of a half-point increase in the Fed’s benchmark short-term interest rate. The Fed is looking to raise rates as inflation surged to 7.5 per cent in January, compared with a year earlier, the biggest increase in four decades

The debate over how quickly to raise interest rates is being closely watched by financial markets and also could have an impact on the broader United States economy. Many economists have said the Fed has moved too slowly in response to an unexpectedly persistent surge in prices, raising the risk that inflation could remain high. But if it raises rates too quickly, the Fed risks choking off growth and hiring.

The bank is almost certain to start lifting interest rates at its March 15-16 meeting, with most officials who have expressed views backing a quarter-point increase. However, James Bullard, president of the Federal Reserve Bank of St Louis, has expressed support for a half-point hike sometime at the Fed’s next three meetings.

Any increase next month would be the first since 2018

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