Washington DC, Sept. 2 -- Federal Reserve Governor Michael Barr has warned that the US central bank may need to raise interest rates decisively if inflation does not moderate sufficiently, keeping a rate hike firmly on the table ahead of the September policy meeting.

Speaking at the Second-Chance Lending Forum in Washington, Barr said the US economy remains solid, with a stable labour market, relatively low unemployment and resilient consumer spending.

"The labor market is stable, with relatively low unemployment. The economy has been growing solidly," Barr said, adding that growth has been supported partly by the boom in AI-related business investment and the expansion of AI capabilities.

However, he said inflation remains the key con...