Fed Governor Barr says he'll support rate hike if inflation doesn't ease

Federal Reserve Governor Michael Barr said Tuesday he would support raising interest rates if inflation fails to ease, signaling potential hawkish action as price pressures remain above the central bank's 2% target. Speaking at a banking forum in Washington, Barr cited concerns about "broader price pressures taking hold" as the rationale for his conditional stance on further tightening.

The comments mark a notable shift in tone from a Fed official at a time when markets have been pricing in rate cuts later this year. Barr's warning underscores the central bank's continued focus on durability of disinflation rather than immediate relief. His reference to the 2% inflation target highlights the gap between current readings and the Fed's long-term objective, keeping the door open for additional policy tightening if progress stalls.

The remarks come as policymakers weigh recent inflation data and assess whether current rates are restrictive enough to bring prices back to target without sparking unnecessary economic weakness.