Fed Governor Barr Says More Rate Hikes Are 'Likely' Needed. Treasury Yields Reach New 19-Year Highs.
Barr said policymakers may need further tightening as S&P Global flash gauges showed manufacturing and services activity at more than four-year highs.
- Fed Governor Michael Barr stated "further policy adjustments are likely to be needed to ensure inflation comes down to target in a timely fashion." He emphasized that price stability remains crucial for maximum employment.
- Input costs for Firms jumped at the steepest rate in four years, with fuel and transport prices spiking higher. Chris Williamson, chief business economist at Market Intelligence, said this will "add further to the upward pressure on selling prices and inflation in the coming months."
- Treasury yields soared, with the 2-year note climbing more than 13 basis points to 4.9%. FedWatch data shows a 71% probability of a rate hike when the Federal Open Market Committee meets Oct. 27-28.
- Last week, the Federal Open Market Committee approved a rate increase moving the benchmark to 3.75%-4%. Barr called the move an "important action" he supported along with the other 11 FOMC voters.
- Expansion in the Service sector hit its fastest rate since 2002, as Job growth rose at a pace rarely exceeded since 2009. Though of 18 meeting participants, only two did not expect another increase this year.
20 Articles
20 Articles
Indices in the red after strong economic activity data and Michael Barr's statements that strengthened estimates for a new interest rate hike by the Fed - Brake and the jump in oil above $100
Mounting inflation pressures and a strengthening economy look to be pushing the Federal Reserve towards an interest-rate hike on the eve of critical national elections, with traders on Wednesday piling into bets on a second straight Fed rate increase in late October. A closely watched measure of U.S. business activity, S&P Global's flash U.S. Composite PMI Output Index, jumped this month to its highest level since July 2021, S&P Global reported …
Federal Reserve Governor Michael Barr signaled that further tightening will be needed to curb inflation after last week's 25-basis-point interest rate hike. The central banker spoke about the outlook for monetary policy at the Chicago Fed's housing conference.
Fed Governor Michael Barr signals more rate hikes needed to tame inflation
Federal Reserve Governor Michael Barr announced that additional rate hikes may be necessary to manage inflation. He indicated that while economic growth is strong, inflation remains above the target of 2%. The central bank recently raised the policy rate to a range of 3.75%-4.00%. Barr's perspective contrasts with the Fed Chairman, who has not provided guidance on future rates.
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