Fed Vice Chair Draws the Line on September Rate Hike Pause Speculation

Lael Brainard, Vice Chair of the United States Federal Reserve (Fed)
[Photo by Yonhap News]

[Asia Economy New York=Special Correspondent Joselgina] Lael Brainard, Vice Chair of the U.S. Federal Reserve (Fed), drew a line against the notion of halting the September interest rate hike raised by some quarters.

Vice Chair Brainard appeared on the economic media CNBC on the 2nd (local time) and stated, "At this point, it is very difficult to find grounds to pause (interest rate hikes)." This can also be interpreted as a rebuttal to Raphael Bostic, President of the Atlanta Federal Reserve Bank, who recently suggested that the September rate hike could be stopped if inflation eases.

Vice Chair Brainard said that there is still a long way to go to reach the Fed's 2% inflation target, emphasizing, "We will undoubtedly do what is necessary to reverse inflation. This is our number one challenge." He mentioned, "If there is no sign of inflation slowing down, it would be appropriate to proceed at the same pace (a 0.5 percentage point increase) at the next meeting." He also noted that it is too early to judge whether inflation has peaked.

The Fed has indicated a so-called 'big step' of raising the benchmark interest rate by 0.5 percentage points at once at least through June and July, following May. However, opinions within the Fed differ regarding the direction after September. While hawkish figures advocate continuing big steps until the benchmark rate rises above the neutral rate, there are also views that the pace should be adjusted by examining economic indicators.

This content was produced with the assistance of AI translation services.