The impact of high interest rates in the USA has not yet been seen
While Barkin, one of the US Federal Reserve officials, said that the effect of high interest rates has not yet been seen, Williams said that interest rates will eventually be reduced, and the timing of this depends on the totality of the data.
Richmond Fed President Thomas Barkin said he expects higher interest rates to further slow the economy and push inflation to the central bank’s 2 percent target.
Barkin, who has a vote on monetary policy decisions this year, said Monday that the strength of the labor market offers the Fed time to gain confidence that inflation is falling sustainably before lowering borrowing costs.
But Barkin added that there was a risk that ongoing housing and services inflation would keep price increases high, as seen this year.
“I’m optimistic that today’s restrictive interest rate level can lift the cap on demand to bring inflation back to our target,” Barkin said. “The full impact of high interest rates has not yet been seen,” he said.
New York Fed President John Williams said that interest rates will eventually be cut, but when this will happen depends on the totality of the data.
Ken Griffin, founder of Citadel, also predicted that even if the Fed does not cut interest rates in September, the cut will definitely happen this year.