2023-06-28 14:35:31
Federal Reserve Chairman Jerome Powell has said the Federal Open Market Committee (FOMC) will implement policies at its July and September meetings to contain persistent inflation pressures and calm a surprisingly resilient labor market. He suggested that interest rates might be raised.
On the 28th, the chairman participated in a panel discussion hosted by the European Central Bank (ECB) in Sintra, Portugal. When asked if the FOMC, which postponed rate hikes in June, will raise policy rates every other meeting in the future, he replied that it may or may not happen, and he himself does not rule out consecutive interest rate hikes. said. He also reiterated that most policymakers expect at least two more rate hikes this year.
“Policies are constraining, but they may not be constraining enough. Constraint policies haven’t been around long enough yet,” Powell said.
Economic data are still consistent with a robust and growing economy, he said. A recession is a significant possibility, but he doesn’t think a recession is the most likely case, he said.
He said supply chain disruptions continued to clear up and headline inflation had fallen, helping to keep inflation expectations subdued. But he also said inflation in some categories, particularly services, showed little sign of progress.
Indicators such as housing and confidence highlight the economic resilience
Source: U.S. Department of Commerce, Conference Board
He said core inflation, excluding food and energy, would not return to the Fed’s 2% target until 2025, suggesting interest rates would remain high for longer than the market currently expects.
“If we were confident that inflation had fallen sharply and was on track to 2%, that would be a different situation,” Powell said. “Then you start thinking regarding easing policy. But we are far from that situation.
Original title:Powell Signals Fed Open to Two Straight Hikes at Coming Meetings(excerpt)
(Updates with comment on inflation in last two paragraphs)
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