Fed officials support higher rate hike to tame inflation in U.S.

Two officials of the U.S. Federal Reserve supported a higher rate hike by the central bank towards the end of this month in order to tame inflation that is still hovering around high levels.

"I'm open-minded about whether it's 25 or 50 basis points," Minneapolis Fed President Neel Kashkari said Wednesday at 2023 Sioux Falls Business CEO event.

"Given the data in the last month, higher inflation than we expected and a strong jobs report, these are concerning data points suggesting we're not making progress as quickly as we'd like," he said about inflation.

Fed's preferred inflation indicator, the core personal consumption expenditures (PCE) price index rose 4.7% annually in January, up from a 4.6% year-on-year gain in December, and coming higher than the market estimate of a 4.3% increase. On a monthly basis, the core PCE price index rose 0.6% in January, up from a 0.4% monthly gain in December, and higher than the market estimate of a 0.4% increase.

Atlanta Fed President Raphael Bostic also supported a 50 basis points of rate hike, saying inflation remains too high, and adding "if we ease up on inflation before it is thoroughly subdued, it can flare anew."

"We must defeat inflation now... We're not there yet, and that is why I think we will need to raise the federal funds rate to between 5 and 5.25 percent and leave it there until well into 2024," he wrote in a statement published Wednesday on Atlanta Fed's website.

Fed made a rate hike of 25 basis points on Feb. 1, raising the target range for the federal funds rate to 4.5% to 4.75%. Its next two-day meeting will conclude on March 22, when its economic projections will also be released.

The U.S. central bank made a total of 425-point rate hikes on seven occasions last year to fight record-high inflation that climbed to its highest level in over 40 years by mid-2022.