The US Federal Reserve’s credibility is “on the line” amid record-high inflation, according to an official on Monday.

“Our credibility is on the line here and we do have to react to the data,” St. Louis Federal Reserve President James Bullard told CNBC.

“However, I do think we can do it in a way that’s organized and not disruptive to markets,” he added.

On Thursday, Bullard said that he expects the Fed would make a total of 100 basis points of interest rate increase before July in order to tame record high inflation.

US consumer prices in January soared to 7.5% year-on-year, marking the largest 12-month increase since February 1982, according to the Labor Department last week.

While the Fed is expected to announce a rate increase after its two-day meeting on March 16, the probability of an increase of 25 basis points stood at 40.2% as of Monday.

The possibility of a 50 basis points hike is 59.8%, according to the Chicago Mercantile Exchange Group.

“I do think we need to front-load more of our planned removal of accommodation than we would have previously. We’ve been surprised to the upside on inflation. This is a lot of inflation,” Bullard said.

Bullard is a voting member of the Federal Open Market Committee (FOMC) this year.​​​​​​​

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