Fed’s Brainard conveys that officials are ‘determined to stay the course’ amid inflation

Yahoo Finance reporter Jen Schonberger details the latest comments made by Federal Reserve Vice Chair Lael Brainard about FOMC policy regarding inflation.

Video Transcript

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JENNIFER SCHONBERGER: Vice Chair of the Federal Reserve Lael Brainard spoke a Thursday afternoon. And said that while there are encouraging signs inflation is coming down, the central bank should stay the course of restrictive monetary policy. In a speech at the Chicago Booth School of Business this afternoon,

Brainard said, quote, "Even with the recent moderation, inflation remains high, and policy will need to be sufficiently restrictive for some time to make sure inflation returns to 2% on a sustained basis. We are determined to stay the course."

Brainard says she's encouraged by a recent deceleration in wage growth and price trends in core goods in non-housing services, which she says signals we're not experiencing a 1970s-style wage price spiral. When asked what impact unwinding the Fed's balance sheet is having, Brainard said, estimates for the impact are probably about 50 to 75 basis points of tightening.

Elsewhere, Thursday, we heard from Boston Fed President Susan Collins, who said there are more rate hikes in store, though she anticipates at a slower pace. Pointing to still sticky high services inflation driven by wage growth, Collins said in a speech at the Boston Fed this morning, quote, "There is more work to do. I anticipate the need for further rate increases, perhaps at a slower pace depending on incoming data, before holding rates at a sufficiently restrictive level for some time."

Collins says she thinks rates, which stand in a range of 4 and 1/4% to 4 and 1/2% should come up to just above 5% before being held for some time at that level.