The US inflationary picture has worsened since the start of the year, which could prolong the Federal Reserve’s ongoing fight against rising prices, a top Fed official warned Friday. The central bank “may have more work to do,” in its inflation fight if the data “show continued strength in the economy and slower disinflation,” Lisa Cook, a voting member of the Fed’s rate-setting committee, said in prepared remarks to an economic conference in Ohio. The Fed has hiked its benchmark lending rate nine times in quick succession since March 2022 as part of an aggressive attempt to bring historically-high inflation down towards its long term target of two percent. But recent turmoil in the banking sector sparked by the dramatic collapse of Silicon Valley Bank amid concerns over its interest-rate exposure caused the Fed to rethink a bigger hike in March. It instead opted for a smaller quarter percentage-point increase. In her speech Friday, Cook warned that core inflation, which excludes volatile food and energy prices, remains elevated well above the level the Fed would like to see.
“The inflation picture is even less favorable than it appeared earlier this year,” she said.
“Altogether, the incoming data would suggest a somewhat higher inflation rate for this year and stronger economic growth.” “The process of returning inflation to two percent has a long way to go and is likely to be uneven and bumpy,” she said. NN: I still see Fed Funds comming in at 6% to 8% the inflation gennie is still not in the bottle…….