Fed officials talk of further rate hikes

According to statements by the U.S. Federal Reserve (Fed) officials, in order to effectively curb inflation, it’s necessary not only to increase borrowing costs, but also to raise interest rates slightly more than previously predicted.

John Williams, chairman of the Federal Reserve Bank of New York, noted that the Fed's policy will be slightly tighter than in September. This is necessary, since demand in the economy has turned out to be higher than previously anticipated. It was said by Williams to reporters on Monday after his webinar.

A similar, but more radical view has James Bullard, president of the St. Louis Fed, known for his tough views on monetary policy. He believes that the markets are mistaken in counting on a less aggressive Fed policy. In fact, it’s necessary to act harshly in order to fight such a high rate of inflation.

Judging by comments made by Fed officials, the pace of rate hikes will slow down at the December 13-14 meeting. This time, the rate will probably be increased by 50 basis points after four hikes of 75.

However, there is no absolute certainty as to how many basis points the rate will be raised. Ultimately, the exact number will be known only after officials analyze the current data and make a decision.