Former Federal Reserve Bank of New York (FRB) Governor William Dudley believes that the Federal Reserve (Fed) will raise the benchmark interest rate by 75 basis points at the end of Wednesday’s meeting to curb US inflation.

“My sense is that the Fed has already decided to raise the rate by 75 bps, rather than 50 bps, following last week’s data indicating higher inflation and worrisome changes in inflation expectations,” Dudley said, speaking at The Wall Street Journal event. At the same time, he did not rule out the possibility of borrowing costs rising by 100 bps at once.

Dudley headed the FRB of New York from 2009 to 2018, before that he worked as chief economist at Goldman Sachs Bank. He previously said the Fed’s key rate could eventually reach 4-5%.

As reported last week by the U.S. Department of Labor, consumer prices (CPI) in the country unexpectedly rose by 8.6% on an annualized basis in May after rising by 8.3% in April, renewing the highest since 1981. Analysts on average expected inflation to remain at April’s level.

In May, the Fed raised the rate by 50 bps, to 0.75-1%. At a press conference following the meeting, Powell said that the Fed would consider a 50 bps rate hike at the next few meetings.

Many market participants fear that an aggressive tightening of monetary policy could lead to a recession in the US. However, Dudley takes a more optimistic view. “I don’t expect a recession in the US in the short term,” he noted. – The economy has significant growth momentum, and that’s why the Fed needs to tighten monetary policy to slow the economy.”