2023-06-21 13:14:31
The Fed should resume its rate hikes, following the pause marked last week, once more hinted on Wednesday its president, Jerome Powell, hammering that “almost all” the leaders of the institution anticipate having to raise them once more from here the end of the year.
“Almost all” of the institution’s officials — governors and regional branch presidents — “expect it to be appropriate to raise interest rates somewhat further by the end of the year. year”, said Jerome Powell in front of elected members of the House of Representatives, during his semi-annual hearing before a committee.
On June 14, the Fed marked a pause in its key rate hikes, for the first time since March 2022, and following 10 hikes, by 5 points in total. Rates are now in the range of 5 to 5.25%.
“At last week’s meeting, given where we were coming from and the speed at which we were moving, we felt it prudent to ‘keep rates where they are, to ‘allow’ Fed officials” to assess the information and its implications for monetary policy,” said Jerome Powell.
These rate hikes, which encourage commercial banks to offer higher rates for loans to households and businesses, are aimed at slowing economic activity, in order to ease pressure on prices, and to slow inflation. .
This remains “well above our long-term objective of 2%”, further indicated the President of the Fed.
Thus, “to determine” how much further they will need to tighten their monetary policy to achieve this objective, “we will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation , as well as economic and financial developments,” he added.
But “reducing inflation will likely require a period of below-trend growth,” warned Jerome Powell. The next Fed meeting will be July 25-26.
Jerome Powell had already, on June 14, following the announcement of the decision of the monetary policy committee, specified that the leaders of the institution anticipated in majority additional rate hikes. However, he had mentioned “a moderate pace”.
The Fed should resume its rate hikes, following the pause marked last week, once more hinted on Wednesday its president, Jerome Powell, hammering that “almost all” the leaders of the institution anticipate having to raise them once more from here. the end of the year.
“Almost all” the heads of the institution — governors…
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