US Federal Reserve (Fed) Governor Michael Barr stated on local time September 1 that he is prepared to support interest rate hikes if inflation does not ease.

Speaking at the Second Chance Lending Forum in Washington D.C. that day, Governor Barr noted that inflation has remained above the Fed's 2% target for nearly five and a half years, adding, "I am concerned that broader price pressures may become entrenched."

"If inflation does not appear to be easing sufficiently, I believe we must decisively raise interest rates," he stated.

His remarks come as market expectations for a rate hike have grown following Fed Chair Jerome Powell's suggestion of a possible September increase, noting that additional action would be necessary if inflation slowdowns prove insufficient.

This effectively means that even Governor Barr, a permanent voting member of the rate-setting Federal Open Market Committee (FOMC), has left the door open to a potential rate hike.

However, he also said, "If the flow of data gives us a certain degree of confidence that inflation is on a path easing toward 2%, I think we can spend a little more time evaluating our policy stance."

According to the Chicago Mercantile Exchange (CME) FedWatch, the market is currently pricing in about a 66% probability of a rate hike this month.

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