(Reuters) – The Federal Reserve needs to get inflation on to a sustainable path down toward its 2% goal this year or else risk a repeat of the 1970s, when interest rates had to be repeatedly ratcheted up, St. Louis Fed President James Bullard said on Wednesday.
“If inflation doesn’t start to come down, you risk this replay of the 1970s where you had 15 years where you’re trying to battle the inflation drag,” Bullard told broadcaster CNBC in an interview.
“… That’s why I’ve said let’s be sharp now, let’s get inflation under control in 2023 and it’s a good time to fight inflation because the labor market is still strong.”
Bullard also repeated his view that a Fed policy rate in the range of 5.25% to 5.5% would be adequate for the task.
Minutes from the U.S. central bank’s latest meeting released later on Wednesday are expected to detail the breadth of debate among Fed officials over how much further interest rates may need to rise to slow inflation and cool an economy that has remained stronger than expected despite tighter monetary policy.
(Reporting by Lindsay Dunsmuir; editing by John Stonestreet and Chizu Nomiyama)