Fed’s Barr keeps rate hike on the table as inflation persists

Federal Reserve Governor Michael Barr stated that inflation remains too high, warning that another interest rate hike could become necessary if price pressures fail to cool down soon. While he currently favors keeping interest rates steady while disinflation progresses, solid economic growth and a stable labor market indicate that persistent inflation remains a key policy concern.

Barr highlighted that solid economic expansion—partially boosted by increased investments in artificial intelligence—alongside low unemployment provides the economy with resilience. However, he emphasized that if inflation fails to moderate as expected, the Federal Reserve will not hesitate to raise rates to bring price stability back toward target.