Fed Governor Barr backs rate hike if inflation stays high

Federal Reserve Governor Michael Barr said he would support an interest rate increase if inflation does not show clear signs of moving back toward the central bank’s 2% target. Barr made the remarks at a banking forum in Washington, saying he is concerned that broader price pressures may be persisting after inflation has remained above target for years. He added that if data show progress toward 2%, the Fed could wait longer before changing policy, but if inflation fails to moderate, officials should act. His comments come as Treasury yields have risen and markets are increasingly expecting a rate hike at the Federal Reserve’s next meeting in two weeks. Barr noted that consumer spending has stayed resilient, even though inflation remains elevated, and upcoming price reports will give policymakers another look at the outlook.