Live news updates: Johnson appoints 12 ministers after week of resignations

Two senior Federal Reserve officials have warned that failure to tame soaring inflation will damage the US economy, with one of them saying the situation is already testing the central bank’s credibility.

Christopher Waller, a Fed governor, and James Bullard, president of the St Louis branch, used separate events to insist the central bank is committed to fighting runaway prices.

“Inflation is a tax on economic activity, and the higher that tax, the more it suppresses economic activity,” Waller said at an event hosted by the National Association for Business Economics.

“So if we don’t get inflation under control, inflation on its own could put us in a really bad economic outcome down the road,” added Waller, who like Bullard, is one of the most hawkish policymakers.

Those concerns were echoed by Bullard, who spoke on Thursday at an event organised by the Little Rock Regional Chamber in Arkansas. He warned that the economic situation is already “straining the Fed’s credibility with respect to its inflation target”.

At an annual rate of 4.7 per cent as of May, so-called core PCE inflation is well above the Fed’s 2 per cent target.

Waller and Bullard support the Fed delivering another 0.75 percentage point rate rise when its monetary policy committee convenes again late this month, after it made the first such increase since 1994 when it met in June.

“We may have to take the risk of causing some economic pain,” Waller said on Thursday, although he stressed recession fears are “overblown”.

Read more about the Fed here