More rate hikes on horizon: Barr says more hikes 'likely' needed to curb inflation

Federal Reserve Governor Michael Barr said Wednesday that another interest rate hike will "likely" be necessary, as the central bank continues to grapple with inflation that remains above its target. "In my base case, further policy adjustments are likely to be needed to ensure inflation comes down to target in a timely fashion," Barr said during a summit on housing affordability organized by the Federal Reserve Bank of Chicago.

Barr, who serves on the Federal Open Market Committee (FOMC), defended last week's unanimous decision to raise the benchmark rate by a quarter of a percentage point, noting that the move was appropriate given that inflation "is above our 2% target and does not show a clear trend toward that target within a timely frame."

The decision, which had been anticipated by the markets, was described by the White House as "unfortunate." Speaking to Fox News, spokesperson Kush Desai stated at the time that "today's rather unfortunate decision by the Federal Reserve to raise interest rates was not supported, from the government's perspective, by a particularly compelling economic argument."

The move marks a milestone in the country's economic policy, as it is the first interest rate hike in three years and represents the regulatory body's most significant decision in years since the last rate cut, marking a clear turning point in the face of inflationary pressures that continue to outpace wage growth.

In a public statement, President Donald Trump questioned the criteria applied by the institution headed by Warsh — appointed by Trump himself to chair the agency — and insisted that the current momentum of investment in the United States justifies much more favorable access to credit. "Interest rates in the United States should be 1%, or less, because we are the World's Best Credit — BY FAR. Our country is THRIVING with new investments!" the president stated.