Former Fed Vice Chairman Predicts More Interest Rate Hikes, Says Battle With Inflation Far From Over

The former vice chairman of the U.S. Federal Reserve thinks the Fed could hike interest rates two more times.

In a new interview with CNBC, Roger Ferguson, who served as the Fed’s vice chairman from 1999 to 2006, says that the first rate hike after July is “certainly baked in.”

“I think there are a number of factors that might encourage that second rate hike. First, they’ve already mentioned that as a possibility. And secondly… the economy is continuing to do very well, fortunately, giving them room for one more move if that’s what the data calls for.”

The Fed decided in June to pause interest rate hikes after raising the rates for the previous 15 months in an effort to combat inflation.

Ferguson says the Federal Reserve is a “data-dependent” central bank.

“I think they were also pretty pleased with the last print from the CPI (consumer price index), but it’s far from over that they’re getting inflation definitely down to that 2% number. And I think part of the problem is inflation still might be stuck a little higher than 2%, forcing them maybe to do not one more [hike] after July, but possibly two if that’s what the data calls for.” 

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