Fed Vice Chair Lael Brainard says it’s ‘very hard’  for the Fed to pause rate hikes

• Lael Brainard, Vice Chair of the Federal Reserve, stated that she does not expect the central bank to stop raising interest rates anytime soon.
• “We’ve still got a lot of work to do to get inflation down to our 2% target,” she said.
• Despite concerns about inflation, Brainard voiced optimism in the economy.

Federal Reserve Vice Chair Lael Brainard said Thursday that the central bank’s current rate-hiking cycle is unlikely to end very soon.

Though she highlighted that Fed officials will remain data-dependent, Brainard stated that the increases are likely to continue until inflation is controlled.

“Right now, it’s very hard to see the case for a pause,” she told CNBC’s Sara Eisen during a live “Squawk on the Street” interview that was her first since being confirmed to the vice chair position. “We’ve still got a lot of work to do to get inflation down to our 2% target.”

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A few officials, most notably Atlanta Fed President Raphael Bostic, have broached the notion of implementing two more 50 basis point rate rises throughout the summer before taking a step back in September. Minutes from the Federal Open Market Committee meeting in May revealed some support for the concept of assessing where things stand in the fall, but no guarantees were made.

However, authorities such as San Francisco Fed President Mary Daly and Governor Christopher Waller have recently emphasized the significance of aggressively employing the central bank’s policy instruments to drive down inflation, which is currently running at its fastest rate since the early 1980s.

“We’re certainly going to do what is necessary to bring inflation back down,” Brainard said. “That’s our No. 1 challenge right now. We are starting from a position of strength. The economy has a lot of momentum.”

However, recent economic data has been uneven.

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According to ADP, private payrolls climbed by only 128,000 in May, the smallest month yet for an employment resurgence that began in May 2020. Labor productivity fell at the fastest rate since 1947 in the first quarter, and the Atlanta Fed forecasts a 1.3 percent growth rate for second-quarter GDP, which fell 1.5 percent in the first quarter.

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