Kansas City Fed President Esther George, speaking in Jackson Hole, Wyoming, where she hosts the Fed’s annual policy retreat, said the central bank hasn’t yet increased interest rates to levels that are weighing on the economy and may have to take them above 4% for a time.
“It’s very important that we are clear in our communication about the destination we are headed,” she told Michael McKee and Kathleen Hays in an interview with Bloomberg Television.
“We have to get interest rates higher to slow down demand and bring inflation back to our target,” said George, who votes on monetary policy this year.
George’s comments helped set the stage for a busy two days of Fed speakers, who will be headlined Friday by Chair Jerome Powell with a speech likely to restate his resolve to keep tightening monetary policy to fight inflation.
The US central bank is raising interest rates rapidly to curb the hottest price pressures in 40 years. US consumer prices rose 8.5% in the 12 months through July, according to Labor Department data. The Fed aims at a different gauge produced by the Commerce Department, called the personal consumption expenditures price index, which rose 6.8% in the year through June.
