Fed Vice Chair Brainard vows 'we are in this for as long as it takes' to stop inflation

cnbc.com:

Federal Reserve Vice Chair Lael Brainard vowed Wednesday to press the fight against inflation that she said is hurting lower-income Americans the most.

That will mean more interest rate increases and keeping rates higher for longer, she said in remarks prepared for a speech in New York.

«We are in this for as long as it takes to get inflation down,» the central bank official said, just two weeks before the Fed's next policy meeting. «So far, we have expeditiously raised the policy rate to the peak of the previous cycle, and the policy rate will need to rise further.»

Markets are betting that the rate-setting Federal Open Market Committee enacts its third consecutive 0.75 percentage point increase in benchmark rates when it meets again Sept. 20-21.

Brainard's remarks reflect recent comments from multiple official who have said rates likely will remain elevated «for some time» even after the Fed stops hiking. The commitment has come from the highest levels of central bank policymakers, including Chairman Jerome Powell and New York Fed President John Williams.

The federal funds rate current is targeted in a range between 2.25%-2.5% following four consecutive FOMC increases this year.

Though inflation has shown signs lately of plateauing, year-over-year increases are near the highest levels in more than 40 years. Supply shocks, record-setting fiscal and monetary stimulus, and the war in Ukraine have contributed to the surge.

Without committing to a specific course of action, Brainard said the Fed needs to remain vigilant.

«With a series of inflationary supply shocks, it is especially important to guard against the risk that households and businesses could start to expect inflation to remain above 2 percent in the longer run,