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Federal Reserve Governor Michael Barr signals potential interest rate hike in September if inflation remains high.

Federal Reserve Governor Michael Barr indicated on Tuesday that he would support an interest rate increase during the September 15–16 Federal Open Market Committee (FOMC) meeting if incoming data shows insufficient progress toward the 2% inflation target. Speaking at the Second-Chance Lending Forum in Washington, D.C., Barr stated that inflation has remained too high for over five years.

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He noted that if inflation does not appear to be moderating sufficiently, the Federal Reserve should act decisively to raise rates. Conversely, if data trends provide confidence that inflation is moving toward the 2% goal, the committee may take more time to assess the policy stance. Barr's remarks come as the Federal Reserve has held the benchmark funds rate between 3.5% and 3.75% for five consecutive meetings in 2026. The most recent headline consumer price index stood at 3.7% annually. Fed Chairman Kevin Warsh also expressed the need for confidence that underlying inflation is moving toward the objective at a sufficient speed. The Federal Reserve will receive at least one more inflation reading before the September meeting.

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