Key facts
- Fed Governor Michael Barr stated that further rate hikes may be necessary to meet the 2% inflation target.
- Barr believes policy needs recalibration to better balance inflation and labor market risks.
- Odds of an October Fed rate hike have fallen to 50% on Polymarket, down from a high of 70%.
- Upcoming PCE inflation data and the September jobs report could influence the Fed's decision.
Federal Reserve Governor Michael Barr reiterated the central bank's potential need for further interest rate increases to curb inflation and achieve its 2% target. In a speech in Detroit, Barr stated that his base case involves further hikes to ensure inflation returns to the target in a timely manner, emphasizing that price stability is crucial for sustainable growth and maximum employment.