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St. Louis Fed Chair Proposes Interest Rate Hike of 0.50% in March to Curb Inflation

As inflation concerns persist, the president of the St. Louis Federal Reserve, James Bullard, has proposed a 0.50% rate hike at the March meeting, which is higher than the 0.25% hike other Fed officials have suggested.

During the February 1 meeting, Bullard expressed his belief that raising interest rates by 0.50% would be more effective in curbing inflation, even if it means a weaker economy. His proposal was backed by the Cleveland Fed President, Loretta Mester, who also suggested that rates should be raised more than the consensus.

The Federal Reserve has been raising interest rates in increments of 0.25% over the past few meetings. In December 2022, it raised rates by 0.50%, and prior to that, it raised rates by 0.75% in four consecutive meetings.

Bullard’s proposal comes as US inflation rates remain high, prompting senior officials to encourage the Fed board to take a more aggressive stance on rate hikes. If the 0.50% hike is approved in March, the new target range for interest rates would be 4.75-5.00%.

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