Fed Officials Say U.S. Needs More Rate Hikes to Cool Inflation

U.S. interest rates will need to be raised further, Federal Reserve Governor Lisa Cook said on Thursday, in order to cool the world’s largest economy and bring inflation under control.

The Federal Reserve has raised interest rates five times this year for a total of three percentage points as annual inflation in the U.S has soared to the fastest in 40 years.

“Inflation remains stubbornly and unacceptably high, and data over the past few months show that inflationary pressures remain broad-based,” Cook said in her first speech as a member of the U.S. central bank’s board.

This year’s price increases can be traced back in part to global supply chain issues that led to shortages of essential components like semiconductors used in automobiles and electronic devices, as well as a lack of available workers.

The situation was worsened by Russia’s invasion of Ukraine in February, which boosted energy prices and affected global food markets, along with China’s zero-Covid policy.

“Restoring price stability likely will require ongoing rate hikes and then keeping policy restrictive for some time until we are confident that inflation is firmly on the path toward our two percent goal,” Cook said.