Fed's Bowman anticipates interest rate hike amid inflation concerns

Federal Reserve Governor Michelle Bowman, a member of the Federal Open Market Committee, has projected a quarter-percentage point increase in interest rates by the end of the year, if inflation progress slows. Bowman made these comments at a banking conference on Monday, pointing out potential inflation risks such as high energy prices.

The governor highlighted the personal consumption expenditures price index (PCE) as a key indicator of these rising energy costs. This comes after the Federal Reserve decided to keep the benchmark rate unchanged last month.

Bowman also brought attention to other economic indicators, including steady gold prices and Tesla (NASDAQ: TSLA )'s market performance. While these factors remained stable, their implications on future economic trends were not specifically addressed during her speech.

In a critical note, Bowman expressed concerns over regulatory proposals from the Federal Reserve and other U.S. banking supervisors. She characterized their approach as "heavy-handed", although she did not elaborate further on this point.

The hawkish governor's comments come amidst ongoing debates within the Federal Reserve regarding the timing and scale of potential interest rate hikes. These are aimed at curbing inflation while ensuring sustained economic growth. The anticipation of a rate hike by year-end underscores the central bank's proactive stance towards managing inflation risks.

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