Fed's Barr Signals More Rate Hikes Needed to Curb Inflation

Federal Reserve Governor Michael Barr said on September 23, 2026, that further interest rate hikes will likely be required to bring inflation down to the central bank's 2% target, citing increased risks to achieving price stability. "In my base case, further policy adjustments are likely to be needed to ensure inflation comes down to target in a timely fashion," Barr said in prepared remarks at a Chicago Fed housing affordability conference. His remarks suggest at least two more hikes may be necessary, though he did not specify timing. Last week, Fed policymakers unanimously raised the policy rate to 3.75%-4.00%, with 16 of 18 officials signaling at least one more hike before year-end. Barr's explicit forward guidance contrasts with Fed Chairman Kevin Warsh's refusal to comment on the rate path. The average rate on a 30-year fixed mortgage rose to 7.12% last week, a more than two-year high, the Mortgage Bankers Association reported.