U.S. Federal Reserve chair says two or more hikes likely needed to cool inflation
BNN Bloomberg
U.S. Federal Reserve Chair Jerome Powell said at least two interest-rate increases are likely necessary this year to bring the inflation rate down to the U.S. central bank’s 2 per cent target and that acting at consecutive policy meetings isn’t “off the table.”
“A strong majority of committee participants expect that it will be appropriate to raise interest rates two or more times by the end of the year,” Powell said Thursday, referencing the policy-setting Federal Open Market Committee. “Inflation pressures continue to run high, and the process of getting inflation back down to 2 per cent has a long way to go.”
In remarks to a conference in Madrid at the Bank of Spain, Powell repeated comments he’s made in the two weeks since the Fed’s last meeting, where policymakers held rates steady for the first time since early 2022.
Officials opted to pause then with rates in a range of 5 per cent to 5.25 per cent, while at the same time signaling two more rate increases may be appropriate this year, to better assess how both policy and banking-sector stresses are impacting the economy.