Fed Officials See End Of Tightening Cycle On Horizon — But Only After A 'Couple More' Rate Hikes

The Federal Reserve is nearing the end of its current monetary policy tightening cycle, with several U.S. central bank officials suggesting that further interest rate hikes may be needed to curb inflation, Reuters reports.

Rate Hiking Cycle Nearing Its End

Since March 2022, the Fed has raised interest rates by 5% points to combat the highest U.S. inflation in four decades. “We’re likely to need a couple more rate hikes over the course of this year to really bring inflation” back to the U.S. central bank’s 2% goal, said San Francisco Fed President Mary Daly.

Future Rate Hikes

While the Fed is expected to deliver a rate hike at their meeting later this month, it’s unclear whether they will raise rates again at the September meeting, wait until November, or just stay on hold and let inflation ease over time.

“We still have a bit of work to do,” said Fed Vice Chair for Supervision Michael Barr.

See Also: New York Fed Survey Shows Lowest Short-Term Consumer Inflation Expectations Since April 2021

Views Within the Fed

There remains a camp within the Fed that feels just the opposite. Cleveland Fed President Loretta Mester stated that if it was up to her alone, she would have moved the rates up. However, she understood the rationale for not moving in June, given the importance of matching market expectations.

Read Next: Fed's Call For Increased Capital Drives Bank Stocks Higher, Paving The Way For A Stronger Financial System

Federal Reserve Photo by Tanarch on Shutterstock

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