Federal Reserve officials signalled that the U.S. central bank will likely continue to raise interest rates despite signs that inflation slowed down at the end of 2022.
Financial markets expect the Fed to raise rates by another 75 basis points by the summer, bringing the Fed's benchmark rate to 5.25-5.5%, from the current rate of 4.5-4.75%.
On Friday, Fed Governor Michelle Bowman said that "there's a long way to go before we reach our 2% inflation objective" and that the Fed is likely to continue raising rates "until we see a lot more progress on that."
- Richmond Fed President Thomas Barkin concurred with Bowman, saying at a separate event that he prefers 25 basis point hikes at this point.
- Barkin indicated that strong job growth and retail sales could be worrisome, if they continue over several months.
- The U.S. economy added 517,000 jobs in January, widely beating expectations and reversing a months-long trend of slowing job growth.
- Retail sales increased by 3% in January, the biggest monthly jump since March 2021.
- The Federal Reserve hiked its federal funds rate by 25 basis points earlier this month.
