Fed Governor: Interest Rates Must Remain High Despite Slowing Inflation

On Thursday (Jan. 19), the governor of the US Federal Reserve (Fed) stated that the Fed needs to keep interest rates high, despite signs that inflation is slowing. The governor emphasized that the Fed will not abandon its commitment to curb inflation, despite it slowing down in recent months. Inflation is currently at its highest level in nearly four decades.

According to CME Group data, the market largely expects the Federal Open Market Committee (FOMC) to raise interest rates by another 0.25%, pushing rates to a range of 4.5%-4.75%. This would be another step in the Fed’s slowing monetary tightening, as in December, the FOMC raised interest rates by 0.50%, following three consecutive rate hikes of 0.75%.

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