Fed Governor Barr says he'll support rate hike if inflation doesn't ease

JUST IN: Fed Governor Barr says he will support an interest rate hike if inflation doesn't ease, warning of 'broader price pressures taking hold' with inflation stuck above the 2% target for nearly 5½ years.

A Fed governor just said the quiet word out loud. Hike.

Michael Barr told a banking forum in Washington this morning that if inflation isn't moderating, the Fed should act decisively and raise rates. His words. Inflation has now been stuck above the two percent target for nearly five and a half years, and the latest reading is 3.7 percent. Barr's worried about broader price pressures taking hold, and as a governor he votes at every single meeting.

He's not alone. Chairman Kevin Warsh leaned the same way last week, and traders noticed. Markets are now pricing roughly a two-thirds chance of a hike at the meeting in two weeks, with the ten-year yield already at its highest since January of last year.

One more inflation print lands next week. That number just became the most important data point in America.

This is Sara White, reporting for HIT.