St. Louis Fed president believes U.S. can avoid recession amid further rate hikes

The president of the Federal Reserve Bank of St. Louis expects interest rates to continue climbing, but believes the United States can avoid entering a recession.

James Bullard said Wednesday he expects the benchmark interest rate to climb by as much as another 1.5% before the end of the year. He said the central bank will keep raising rates until it is satisfied rising inflation rates have begun to fall.

Bullard is a voting member this year on the rate-setting Federal Open Market Committee.

A key government inflation gauge showed on Friday that prices have risen by close to 7% over the past year -- yet another figure stoking fears of an impending recession and fueling rising economic discontent among the American public.

"I think we'll probably have to be higher for longer in order to get the evidence that we need to see that inflation is actually turning around on all dimensions and in a convincing way coming lower, not just a tick lower here and there," Bullard said during a TV interview with CNBC.

Despite the prediction of further interest rate hikes, Bullard said that does not guarantee a recession.

"We're not in a recession right now. We do have these two quarters of negative GDP growth. To some extent, a recession is in the eyes of the beholder," he told CNBC.

"With all the job growth in the first half of the year, it's hard to say there's a recession. With a flat unemployment rate at 3.6%, it's hard to say there's a recession."

This comes a day after some of his fellow Federal Reserve members said the country has a lot of work to do to get inflation under control.

"(Interest rates are) nowhere near almost done," San Francisco Federal Reserve President Mary Daly said in an interview with NBC Tuesday.

"We have made a good start and I feel really pleased with where we've gotten to at this point."

Separately on Tuesday, Chicago Federal Reserve President Charles Evans said he was hopeful future rate hikes would be moderate, but said he too could envision a scenario of further supersize rate increases this year.

"Fifty [basis points] is a reasonable assessment, but 75 could also be OK. I doubt that more would be called for," Evans told reporters.

In late July, the Federal Reserve ordered another 0.75% interest rate hike amid increasing pressure to control high-running inflation that's making essential items more expensive for Americans.

At the time, Fed Chair Jerome Powell said he did "not think the U.S. is currently in a recession. The reason is there are too many areas of the economy that are performing too well."