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Fed Governor Barr says more rate hikes may be needed to reach 2%

Barr said the Fed was “out of position” and needs to recalibrate, while the US Dollar index traded above 101.0 and rose 0.5% on the day.

Reported · Written up by our desk · Central Banks

Federal Reserve Governor Michael Barr said on Wednesday that further interest rate hikes are likely needed for the central bank to achieve a timely return to its 2% inflation target, according to FXStreet.

Barr delivered what FXStreet described as a hawkish message, citing increased risks to hitting 2% inflation and noting that labor market risks have receded, while also saying the Fed was “out of position” and needed to “recalibrate” policy.

FXStreet said the remarks were consistent with expectations for additional tightening because inflation was not clearly trending toward the target amid strong growth and a solid labor market, which could support the US Dollar versus lower-yielding currencies.

After the comments, the US Dollar Index held bullish momentum, trading at its highest level since late July above 101.00 and rising 0.5% on the day, FXStreet added.

Latest closeDollar index 101.16 ▲0.7%

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