Fed’s Powell: Ready to accelerate rate hike

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“While inflation has softened in recent months, there is still a long way to go before it returns to a 2% inflation rate, which will likely be bumpy,” the Fed chair said. He said the latest economic data is better than expected, especially regarding labor market figures.

This indicates that the final interest rate level will likely be higher than previously assumed. “We would be willing to increase the pace of rate hikes if the data show that faster tightening is necessary,” Powell said. Inflationary pressure is higher than expected at the last Fed meeting.

The Fed slowed the rate hikes again at its February meeting. It raised prime interest rates by 0.25 percentage points to a range of 4.50 to 4.75 percent. It had increased the policy rate by 0.50 points in December. It had previously raised interest rates by 0.75 percentage points four times in a row.

Fed Chairman Jerome Powell has previously announced that he will continue to raise interest rates. But he stressed that it would likely take until 2024 for inflation to reach the Fed’s 2 percent target again.

Economists point to the still very strong labor market making it difficult for inflation to come down. The US economy will slow down with higher interest rates. But so far, tight monetary policy has had no visible impact on the booming job market in the world’s largest economy.

(SDA)

Source :Blick