Feb 13 (Reuters) - The Federal Reserve will need to continue to raise interest rates in order to get them to a level high enough to bring inflation back down to the central bank's target rate, Fed Governor Michelle Bowman said on Monday.
"I expect we'll continue to increase the federal funds rate because we have to bring inflation back down to our 2% goal and in order to do that we need to bring demand and supply into better balance," Bowman said during an American Bankers Association conference in Florida.
The Fed's benchmark overnight lending rate is currently in the 4.50%-4.75% range. Once at a sufficiently restrictive level, interest rates will then need to be held for "some time" to restore price stability, Bowman said without offering specifics on the rate peak she would like to see.
Last week several Fed policymakers echoed the sentiment that more rate hikes were needed, but none were ready to suggest that huge job gains reported for January could push them back to a more aggressive monetary policy stance.
By the Fed's preferred measure, inflation is still running at a 5% annual rate.
Bowman also said that a very strong labor market alongside moderating inflation meant a so-called economic 'soft landing' remains possible.
