(Reuters) – The U.S. Federal Reserve can assess how way more it must do to carry inflation again all the way down to its 2% aim when it has raised borrowing prices to a impartial degree, Richmond Fed President Thomas Barkin stated on Tuesday.

“As soon as we get within the vary of the impartial fee, we are able to then decide whether or not inflation stays at a degree that requires us to place the brakes on the economic system or not,” Barkin stated in ready remarks to a neighborhood chamber of commerce in North East, Maryland, including the central financial institution might keep away from inducing a Nineteen Eighties-style recession as its tries to drive down inflation.

The central financial institution final week raised its benchmark in a single day lending fee by half a proportion level and has pivoted in current months to grow to be extra aggressive in tightening coverage because it seeks to return inflation, which stays at a 40-year excessive, nearer to its aim.

“We’ll do what we have to do,” Barkin stated, noting in his speech Fed Chair Jerome Powell’s current feedback that fifty foundation level hikes are on the desk for the Fed’s subsequent two coverage conferences in June and July.

There are some tentative indicators inflation has peaked, which might be welcomed by Fed policymakers as they search to keep away from having to grow to be extra aggressive with fee hikes to rebalance the economic system.

A U.S. authorities report on Wednesday is predicted to indicate client worth inflation slowed barely in April. That stated, the Fed’s most well-liked measure of inflation continues to be operating greater than thrice above the central financial institution’s aim.

However Russia’s invasion of Ukraine, which has pushed up meals and vitality costs, and up to date lockdowns in China to tamp down COVID instances stay a fantastic supply of uncertainty in assessing how lengthy outsized inflation pressures will stay.