Fed may need to accelerate rate hikes, Jerome Powell says

The Federal Reserve may need to 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 economy and persistently high inflation, Federal Reserve Chair Jerome Powell said Tuesday in prepared testimony to a Senate panel.

"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," Powell said in the testimony to the Senate Banking Committee. 

Powell's comments raise the possibility that the Fed will increase its key interest rate by a half-percentage point at its next meeting March 21-22, after having carried out a quarter-point hike in early February. Over the past year, the central bank has raised its key rate — which affects many consumer and business loans — eight times.