Chair Jerome Powell's comments raise the possibility that the Fed will increase its key interest rate by a half-percentage point at its next meeting, after having carried out a quarter-point hike in February.
US Federal Reserve Board Chair Jerome Powell testifies before the Senate Banking, Housing and Urban Affairs Committee on"The Semiannual Monetary Policy Report to the Congress," in the Hart Senate Office Building on Capitol Hill in Washington, DC, onThe Federal Reserve could increase the size of its interest rate hikes and raise borrowing costs to higher levels than previously projected if evidence continues to point to a robust"The latest economic data have come in stronger than...
"The presumption that’s been established is that they will hike in March, unless they are convinced otherwise," said Derek Tang, an economist at LHMeyer, an economic consulting firm. "If you could speak directly to the 2 million hardworking people who have decent jobs today, who you’re planning to get fired over the next year, what would you say to them?" Warren asked.
"I don’t think fiscal policy right now is a big factor driving inflation," Powell responded. But he also acknowledged that if Congress reduced the deficit, that "could" help slow price increases. The Fed chair also said that inflation "has been moderating in recent months" but added that "the process of getting inflation back down to 2 percent has a long way to go and is likely to be bumpy." Inflation, as measured year over year, has slowed from its peak in June of 9.1% to 6.4%.
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