(Bloomberg) -- Federal Reserve Vice Chair for Supervision Michael Barr said the US central bank is “likely at or very near” a level of interest rates that is sufficiently restrictive, echoing Chair Jerome Powell’s message that officials can proceed carefully on whether to hike again.

Barr, speaking Monday in New York at a Forecasters Club event, argued the bigger question is how long rates will need to stay high, adding that the full effects of past increases on the economy “are yet to come in the months ahead.”

His comments aligned with the dovish camp of Fed officials who expect to keep rates steady for the rest of the year.

“I think it is likely that we are at or very near to the level that is sufficiently restrictive to bringing inflation back to 2% over time,” Barr said while answering questions after a speech at the event.

“I think we are going to be increasingly focusing on thinking about the path of interest rates over time,” he said. “I think it is likely that we’ll need to keep rates up for some time in order to get inflation down to 2%. I’m confident that we’ll get there.”

On Friday, New York Fed President John Williams also suggested the central bank may be done raising interest rates following a decision at its last policy meeting in September to leave the target range for its benchmark unchanged at 5.25% to 5.5%, a 22-year high.

Dual Mandate

Still, projections published at the same time showed 12 out of 19 policymakers expected one more rate increase for this year, and fewer rate cuts in 2024 than previously anticipated, in part due to a better outlook for the labor market.

“I strongly agree with what Chair Powell has said about where we are in the tightening cycle. Given how far we have come, we are now at a point where we can proceed carefully,” Barr said Monday in his prepared remarks.

“As we watch how conditions evolve, I remain highly attuned to risks to achieving both components of our mandate,” he added, referring to the central bank’s congressionally-mandated goals of maximum employment and price stability.

Elsewhere on Monday, Fed Governor Michelle Bowman reiterated that multiple additional hikes may be needed to return inflation to the central bank’s 2% target.

Fresh data released last week showed that prices of personal consumption expenditures excluding food and energy, the Fed’s preferred measure of underlying inflation, climbed just 0.1% in August, marking the slowest monthly pace since late 2020. 

Some analysts said the data implied Fed officials’ latest projections for what inflation will be in 2023 are already looking too high and make the odds of an additional rate increase this year even less likely.

Investors are currently assigning roughly even odds to another hike in 2023, according to futures.

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