Page 31 - Fomc News Today

Central bankers must augment what they learn from incoming data with clues gleaned from the real economy and avoid putting too much weight on financial markets, said Federal Reserve Bank of Chicago President Austan Goolsbee.

Federal Reserve Bank of Atlanta President Raphael Bostic called for continued interest-rate hikes to above 5% ensure that inflation returns to the central bank's target and doesn't reaccelerate in a pattern similar to the 1970s.

Mohamed El-Erian says the financial markets are starting to doubt whether the Federal Reserve can bring inflation down to its 2% target.

Cleveland Fed President Loretta Mester said a bigger-than-expected rise in the central bank's preferred inflation gauge shows the need to keep raising interest rates.

Last week, I made the case that the Fed is more likely to ramp up its rate hike campaign now that Joe Biden has poached its dovish vice chair. The newly released minutes from last months Federal Open Market Committee meeting confirm that several members wanted to increase the federal funds rate by half a percentage point, twice the 25 basis point hike they ultimately approved.

Spot gold was up 0.1% at $1,835.40/oz in early trade, while US gold futures also firmed 0.1% to $1,845.10

Federal Reserve Bank of St. Louis President James Bullard said the U.S. economy is proving more resilient than expected and repeated his call for the central bank to keep raising interest rates.

Two of the Federal Reserve board's seven governors abstained from supporting the selection of former Obama aide Austan Goolsbee to become president of the Chicago Fed, according to a record of the vote.

"At this juncture, the incoming data have not changed my view that we will need to bring the fed funds rate above 5% and hold it there for some time," Mester said.

Two officials said Tuesday that interest rates may need to move to a higher level than anticipated to ensure inflation continues to ease.