[Economics] Fed's Bowman Still Sees Case for Interest Rate Hikes If Inflation Persists

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Welcome to Investopedia's economics live blog, where we explain what the day's news says about the state of the U.S. economy and how that's likely to affect your finances. Here we compile data releases, economic reports, quotes from expert sources and anything else that helps explain economic issues and why they matter to you. Today, Federal Reserve speakers continued to speak about their fight against inflation and a leading economic indicators index showed declines over the past six months.Federal Reserve's Bowman Still Sees Case for Interest Rate Hikes If Inflation Persists 1 HR 20 MIN AGO Federal Reserve Governor Michelle Bowman once again reiterated her openness to raising interest rates Friday, saying there are still risks that inflation could rise. “While the current stance of monetary policy appears to be at a restrictive level, I remain willing to raise the target range for the federal funds rate at a future meeting should the incoming data indicate that progress on inflation has stalled or reversed,” Bowman said at a Pennsylvania bankers’ convention. 1 Like other Fed officials, Bowman said the central bank needs more data showing a decline in inflation before it can move to change interest rates from their current 23-year high. Recently, the Consumer Price Index (CPI) inflation gauge came in softer than expected and U.S. retail sales data showed consumers may be reaching their spending limit. However, Bowman said progress on inflation may still be slowing after price pressures eased substantially in the second half of last year.How the Housing Shortage Could Impact the U.S. Budget 1 HR 22 MIN AGO Add the federal budget to the long list of the aspects of American life affected by the chronic housing shortage. Members of the House Armed Service Committee are reportedly planning to ask for an extra $1.2 billion during the budget process to help servicemembers pay for housing, according to a report from Roll Call. 2 Military families and their civilian counterparts have faced soaring costs for shelter in the last few years. Potential home buyers have been hit by surging prices caused by a low number of homes for sale and mortgage rates that are at or near their highest in decades. These factors have pushed monthly mortgage payments on median-priced homes well out of reach for all but high-earning buyers. Those who lease their home have faced similar issues, with rents increasing 23% since the onset of the pandemic, according to the Consumer Price Index. 3 Marilyn Strickland, a Democratic congresswoman from Washington, whose district includes about 50,000 military personnel and civilians at the Joint Base Lewis-McChord near Tacoma, told Roll Call that “access to affordable housing remains the top issue for servicemembers.” The military housing allowance is given to servicemembers to pay for civilian housing if they aren’t quartered on a military base. 4 While $1.2 billion is a drop in the bucket of the $825 billion defense budget, the request highlights how the high costs of housing have impacted every corner of the economy.

https://www.investopedia.com/us-economy-news-may-17-8650246