NATIONAL NEWS

Top Fed official sees need for more interest rate increases

Apr 14, 2023, 5:32 AM | Updated: 7:30 am

WASHINGTON (AP) — A senior Federal Reserve official said Friday that there has been little progress on inflation for more than a year and that more interest rate hikes are needed to get prices under control.

Christopher Waller, a member of the Fed’s governing board, did not specify how many more increases he supports, but said that inflation “is still much too high and so my job is not done.”

Last month, inflation slowed as food and gas prices fell, but excluding those volatile categories, “core” prices kept rising and are 5.6% higher than a year ago. Waller pointed out that core prices have risen at about that same pace, or higher, since December 2021.

Waller’s comments expressing support for more rate hikes follow a forecast by the Fed’s staff economists, revealed in Fed minutes Wednesday, for a “mild recession” later this year.

Waller said that, like most of his colleagues, he is closely watching whether the collapse of two large banks last month will lead to a broad cut back in lending by the banking system, which could slow the economy.

But so far it’s not clear how large the impact will be, he said, and job growth remains strong and inflation is far above the Fed’s 2% target, “so monetary policy needs to be tightened further.”

His comments, delivered in San Antonio, Texas, echo those of several of his colleagues, who have said in recent weeks that they support at least one more rate hike. That would put the Fed’s benchmark rate at about 5.1%, the highest in 16 years.

Waller also underscored that he supported keeping the Fed’s benchmark rate elevated for much longer than investors expect. Traders in interest-rate futures expect that the central bank will lift rates one last time at the Fed’s next meeting in May, and then cut them three times by the end of the year, according to the CME Fedwatch tool.

Those expectations likely reflect an assumption that the economy will tumble into a recession, forcing the Fed to pivot toward lower interest rates.

Waller, however, said that the slow progress on inflation meant that, “Monetary policy will need to remain tight for a substantial period of time, and longer than markets anticipate.”

Still, Waller did express some optimism, particularly about signs in Wednesday’s inflation report that showed rental price growth is finally slowing, after months of sharp gains. The number of new apartments under construction is at historically high levels and vacancies have ticked up, pushing developers to lower rents on new apartment leases.

Waller said as those trends continue to feed into government rental price data, inflation will fall further. By the end of this year it could reach as low as 3% to 3.5%, he said.

National News

Associated Press

Pursuit of Milwaukee carjacking suspects ends with police shooting 2 teens in stolen vehicle

MILWAUKEE (AP) — A police pursuit of carjacking suspects in Milwaukee ended Thursday with police firing into the vehicle and injuring two teens, one of whom was pregnant and lost her baby, Milwaukee police said. Officers tried to stop the stolen vehicle just before 2:30 p.m. on Interstate 43 north of Milwaukee. The pursuit ended […]

4 hours ago

Associated Press

2 crop dusting airplanes collided in southern Idaho, killing 1 pilot and severely injuring the other

ARCO, Idaho (AP) — Two crop dusting airplanes collided near an airport in southern Idaho on Thursday and crashed to the ground, killing one of the pilots and leaving the other with life-threatening injuries, officials said. The crash was reported at about 12:30 p.m. in an area covered by sage and grass near the airport […]

5 hours ago

Associated Press

Appeals court panel refuses to delay Trump ally Steve Bannon’s 4-month contempt prison sentence

WASHINGTON (AP) — A federal appeals court panel on Thursday rejected longtime Donald Trump ally Steve Bannon’s bid to stay out of prison while he fights his conviction for defying a subpoena from the House committee that investigated the U.S. Capitol attack. Bannon is supposed to report to prison by July 1 to begin serving […]

6 hours ago

Associated Press

Gold bars and Sen. Bob Menendez’s curiosity about their price takes central role at bribery trial

NEW YORK (AP) — Prosecutors showed jurors at Sen. Bob Menendez ’s trial on Thursday multiple instances when he researched the value of gold as he tried to help a New Jersey businessman who authorities say bribed him with gold and cash. The evidence about the Democrat’s online searches was prominently displayed to a New […]

10 hours ago

Associated Press

Bill allowing doctor-assisted suicide in Delaware fails in Senate

DOVER, Del. (AP) — A bill allowing doctor-assisted suicide in Delaware failed to win approval in the state Senate on Thursday after narrowly clearing the House earlier this year, but it could come back next week. The legislation failed in the Democrat-led Senate in a 9-9 tie after three members of the Democratic caucus spoke […]

11 hours ago

Associated Press

Amtrak trains suspended from Philadelphia to New Haven by circuit breaker malfunction

NEW YORK (AP) — Amtrak trains were temporarily suspended Thursday afternoon from Philadelphia to New Haven, Connecticut, by a circuit breaker malfunction, the national rail service said. The technical issue led to a widespread loss of power on the tracks between Penn Station in New York City and Union Station in Newark, New Jersey at […]

12 hours ago

Top Fed official sees need for more interest rate increases