Federal Reserve officials sound warnings about higher rates

By CHRISTOPHER RUGABER
AP Economics Writer

WASHINGTON (AP) — A run of strong economic data and signs that inflation remains stubbornly high could lead the Federal Reserve to raise its benchmark rate higher in the coming months than it has previously forecast, several Fed officials say. Christopher Waller, a member of the Fed’s Board of Governors, said that if the economy continued to show strength and inflation remained elevated, the Fed would have to lift its key rate above 5.4%. That would be higher than Fed officials had signaled in December. His suggestion was in contrast to a speech he gave in January, titled “A Case for Cautious Optimism,” that captured a prevailing sentiment at the time that inflation had peaked and was steadily declining.