US interest rates in ‘good place,’ for now: Fed officials

AFP, Washington :
High US interest rates are doing their job in the fight against inflation, but more hikes may yet be needed, senior US Federal Reserve officials said Thursday.

The comments from three regional Fed presidents with a vote on setting interest rates will likely solidify expectations that the US central bank intends to hold rates steady later this month amid growing signs of weaker labor market conditions.

The Fed has raised its benchmark lending rate 11 times over the past 18 months to a level not seen for 22 years as it grapples with inflation still stubbornly above its long-run target of two percent.

After rapidly raising interest rates last year, the Fed slowed down the pace of its hikes over the summer, holding rates steady in June and then raising them by just 25 basis points in July.

Traders currently put the chances of a September pause at more than 90 percent, according to data from CME Group.

“Another skip could be appropriate when we meet later this month,” Dallas Fed President Lorie Logan told a conference in Dallas on Thursday, according to prepared remarks.

“But skipping does not imply stopping,” she continued, adding that “further evaluation of the data and outlook could confirm that we need to do more to extinguish inflation.”