Federal Reserve Governor Michael Barr said that if inflation fails to fall, the Federal Reserve should be prepared to raise interest rates. He warned that inflation has been above target levels for more than five consecutive years, and there is a risk that price pressure will solidify. Barr said that if the data released in the future can send a signal that inflation is cooling down, the Federal Reserve is in a position to be patient. “If data trends give me some confidence that inflation is falling back towards the 2% target, then I think we can spend more time evaluating current policy positions,” Barr said in a speech at an event in Washington on Tuesday. “But if inflation doesn't seem to slow enough, I think we should act decisively to raise interest rates.”

Federal Reserve Governor Michael Barr said that if inflation fails to fall, the Federal Reserve should be prepared to raise interest rates. He warned that inflation has been above target levels for more than five consecutive years, and there is a risk that price pressure will solidify. Barr said that if the data released in the future can send a signal that inflation is cooling down, the Federal Reserve is in a position to be patient. “If data trends give me some confidence that inflation is falling back towards the 2% target, then I think we can spend more time evaluating current policy positions,” Barr said in a speech at an event in Washington on Tuesday. “But if inflation doesn't seem to slow enough, I think we should act decisively to raise interest rates.”