“Data from January employment, consumer spending, manufacturing production inflation have partly reversed the softening trends that we’ve seen in the data just a month ago,” Powell said.
“The ultimate level of interest rates is likely to be higher than previously anticipated.”
In his biannual Monetary Policy Report to the Senate Committee on Banking on Tuesday, Federal Reserve chair Jerome Powell said that the Fed is “prepared to increase the pace of interest rate hikes” to help inflation return to its 2% target.
“If totality of incoming data indicates faster tightening is warranted, we are prepared to increase pace of rate hikes,” said Powell, warning of possible additional rate hikes.
Powell said that the central bank will continue to make decisions meeting by meeting, based on totality of incoming data and implications for outlook for growth and inflation. So far, a series of interest rate hikes that began in 2022 has resulted in a little slowing of inflation, and it remains a concern.
“Ongoing increases in policy rate likely appropriate in order for stance to be sufficiently restrictive to get inflation back to 2% over time,” he said.
Data from January employment, consumer spending, manufacturing production inflation have partly reversed the softening trends that we’ve seen in the data just a month ago.
