“Real interest rates judged — by the expectations over the next year of inflation — have to be in positive territory and held there for a time,” she said Thursday in an interview on CNBC. “We’re still not even in restricted territory on the funds rate.”
Fed officials raised interest rates by 75 basis points on Sept. 21 for the third straight meeting, bringing the target for the benchmark federal funds rate to a range of 3% to 3.25%.
The Fed’s quarterly Summary of Economic Projections shows a median forecast of rates reaching 4.4% by the end of this year, implying a further 1.25 percentage points of tightening over their remaining two meetings in November and December.
“In my SEP I have inflation coming down, but we have to bring interest rates up to get that downward shift in inflation,” she said, calling her forecast probably a bit above the median projection.
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Source: Economy - investing.com
