Fed Bar: If inflation is not reduced, interest rates should increase

Federal Reserve Governor Michael Bar on Tuesday stated that if inflation fails to decline properly, the Central Bank should consider raising interest rates. Prior to the forthcoming Fed policy meeting on 16 September, Bar noted that inflation and economic prospects would be at the forefront of the agenda. He said, "If data trends give me confidence that inflation will slow down to 2 per cent, then I think we can spend more time assessing our policy position." However, he also warned that "if inflation does not seem to be sufficiently moderate, then I think we should take decisive action to raise interest rates. " Bar also mentioned that recent inflation data are mixed and that, although consumer price index reports were moderate in June and July, individual consumption expenditure index reports were more persistent. Bar believes that inflation is still too high, and points to a range of shocks, including tariffs, the Middle East conflict and fast-growing artificial intelligence, which "gets us off track."