Fed Chair Warns of Higher Interest Rates Than Previously Anticipated, Faster Hikes

Fed Chair Warns of Higher Interest Rates Than Previously Anticipated, Faster Hikes

Federal Reserve Chairman Jerome Powell has warned that “the ultimate level of interest rates is likely to be higher than previously anticipated.” In addition, if faster tightening is warranted, the Fed “would be prepared to increase the pace of rate hikes,” Powell said. The Fed Anticipates Higher Rates, Faster Hikes

Federal Reserve Chairman Jerome Powell presented the Fed’s semiannual Monetary Policy Report to the Senate Committee on Banking, Housing, and Urban Affairs on Tuesday and the House Committee on Financial Services on Wednesday.

“My colleagues and I are acutely aware that high inflation is causing significant hardship, and we are strongly committed to returning inflation to our 2% goal,” Powell said in his identical remarks to both the Senate and House committees. He detailed: Over the past year, we have taken forceful actions to tighten the stance of monetary policy. We have covered a lot of ground, and the full effects of our tightening so far are yet to be felt. Even so, we have more work to do.

“The data from January on employment, consumer spending, manufacturing production, and inflation have partly reversed the softening trends that we had seen in the data just a month ago,” Powell continued.

Citing inflation well above the Fed’s 2% goal and an “extremely tight” labor market, he noted the Federal Open Market Committee (FOMC) meeting raised interest rates by 4-1/2 percentage points over the past year. “From a broader perspective, inflation has moderated somewhat since the middle of last year but remains well above the FOMC’s longer-run objective of 2%,” Powell described, emphasizing: We continue to anticipate that ongoing increases in the target range for the federal funds rate will be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive to return inflation to 2% over time.

While acknowledging that “inflation has been moderating in recent months,” the Federal Reserve chairman stressed that “the process of getting inflation back down to 2% has a long way to go and is likely to be bumpy.”

Cautioning that restoring price stability will likely require the Fed to “maintain a restrictive stance of monetary policy for some time,” Powell concluded: The latest economic data have come in stronger than expected, which suggests that the ultimate level of interest rates is likely to be higher than previously anticipated. If the totality of the data were to indicate that faster tightening is warranted, we would be prepared to increase the pace of rate hikes. Tags in this story Fed Chair Powell rate hikes, fed rate hikes, Federal Reserve rate hikes, House committee, interest rate hikes, Jerome Powell interest rates, senate committee

What do you think about Fed Chair Powell’s statements? Let us know in the comments section below. Kevin Helms

A student of Austrian Economics, Kevin found Bitcoin in 2011 and has been an evangelist ever since. His interests lie in Bitcoin security, open-source systems, network effects and the intersection between economics and cryptography. India-Russia Oil Deals Chip Away at Dollar Dominance in International Trade ECONOMICS | 6 hours ago Like Venezuela, Some Retailers in Argentina Are Now Pricing Items in Dollars ECONOMICS | 11 hours ago

Image Credits: Shutterstock, Pixabay, Wiki Commons Previous articleIndia-Russia Oil Deals Chip Away at Dollar Dominance in International Trade Next articleEthereum Co-Founder Vitalik Buterin’s Address Sells Trillions of Airdropped Tokens, Causes Illiquid Coin Prices to Plummet Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article. Read disclaimerShow comments More Popular NewsIn Case You Missed ItRipple CEO: SEC Lawsuit Over XRP "Has Gone Exceedingly Well"

The CEO of Ripple Labs says that the lawsuit brought by the U.S. Securities and Exchange Commission (SEC) against him and his company over XRP "has gone exceedingly well." He stressed: "This case is important, not just for Ripple, it’s ... read more.Tony Hawk"s Latest NFTs to Come With Signed Physical Skateboards Goldman Predicts US Recession Odds at 35% in 2 Years, John Mauldin Wouldn"t Be Surprised if Stocks Fell 40% Survey: Adoption in Argentina Grows, With 12 out of 100 Adults Having Invested in Crypto Economist Predicts the Fed"s Response to Inflation Will Push Crypto Higher