“Jerome Powell” emphasizes that the Fed will adjust interest rates higher - possibly faster. Waiting to consider employment-inflation data
Jerome PowellPhotographer: Al Drago/Bloomberg
On March 8, 2566, Reuters reported that Jerome Powell, Chairman of the Federal Reserve (Fed), said on Wednesday This again emphasizes the possibility of a higher and possibly faster interest rate increase. But he stressed that discussions were still underway to decide on the data to be released ahead of the Federal Reserve's policy meeting in two weeks.
Powell told the US House of Representatives: “I would like to emphasize that no decision has been made in this matter. But if all the data indicates that faster tightening is warranted. We are ready to increase the interest rate.”
Powell reiterated his point in response to a question about the expected outcome of the March 21-22 meeting from Rep. Patrick McHenry, the Republican committee chairman. "No decisions have been made," he said, adding that he would closely watch employment data due on Friday and inflation data next week. To decide whether interest rate increases need to revert to higher levels
As happened in Tuesday's session. Lawmakers pressed Powell about the impact of Fed policy on the economy. and whether officials risk recession in pushing for rate hikes.
Powell again conceded that the Fed was wrong in the first place to think that inflation was just the result of temporary factors that would subside on their own. They were also surprised by the behavior of the labor market through the recovery from COVID-19.
The Fed's intense fight against inflation in the past year has transformed financial markets. This makes home mortgages and other loans more expensive. and aims to slow down the overall economy At the beginning of the year it seemed to be working. At a Feb. 1 press conference, Powell said the process of destroying inflation had already taken place. But inflation data since then has been worse than expected. And corrections from previous months show the Fed has made less progress than thought in returning inflation to its 2% target from current levels, which is more than twice as likely.
As Powell gave his opening speech New jobs data shows little progress on one measure the Fed is focusing on. Employers still have 1.9 positions open for the unemployed. This is higher than the norm before the pandemic. However, other data gradually moved in a direction consistent with the sluggish job market. Overall exposure decreased slightly. The employee turnover rate continues to decline gradually. and the layoff rate is increasing.
On Wednesday, the Fed's "Beige Book" reported on insights into the economy. It shows a mixed picture emerging from the ground up. This is because some businesses report passing on higher prices to consumers. Declining corporate profits, Powell said at a hearing this week, will likely help drag down inflation. After increasing during the era of epidemic shortage
