Any increase next month would be the first since 2018.
WASHINGTON — Federal Reserve Governor Michelle Bowman said Monday that she was open to lifting interest rates by more than the traditional quarter-point at the central bank’s next meeting in March. Bowman’s comments came after several officials on Friday pushed back against the idea of a half-point increase in the Fed’s benchmark short-term interest rate. The Fed is looking to raise rates as inflation surged to 7.5 percent in January compared with a year earlier, the biggest increase in four decades. The debate over how quickly to raise interest rates is being closely watched by financial markets and also could have an impact on the broader economy. Many economists have said the Fed has moved too slowly in response to an unexpectedly persistent surge in prices, raising the risk that inflation could remain high. But if it raises rates too quickly, the Fed risks choking off growth and hiring. The bank is almost certain to start lifting interest rates at its March 15-16 meeting, with most officials who have expressed views backing a quarter-point increase. However, James Bullard, president of the Federal Reserve Bank of St. Louis, has expressed support for a half-point hike sometime at the Fed’s next three meetings. Any increase next month would be the first since 2018. Bowman said in prepared remarks to an American Bankers Association Conference in Palm Desert, California, that she supported lifting rates next month and that “if the economy evolves as I expect, additional rate increases will be appropriate in the coming months.” “I will be watching the data closely to judge the appropriate size of an increase at the March meeting,” she added, suggesting she is open to a half-point hike.
