Jerome Powell, chairman of the Federal Reserve (Fed), the central bank of the United States, announced on the 2nd (local time) that interest rates would rise this month.
“With inflation well above 2% and a strong labor market, we expect it to be appropriate to raise the target range for the federal rate at this month’s meeting,” Powell said during a hearing on the House Financial Services Committee. “I support a 0.25 percentage point increase,” Powell said.
The Fed announced earlier in January that it would raise interest rates soon following the Federal Open Market Committee (FOMC) meeting. It was mentioned that March is the most likely period for the increase. The next FOMC will be held from the 15th to the 16th.
The current U.S. benchmark interest rate is 0.00-0.25%, which is virtually zero interest rate. Many Fed members support a moderate rate hike of 0.25 percentage points. The last time the Fed raised interest rates was December 2018.
Powell said the near-term impact of a Russian invasion of Ukraine on the US economy was very uncertain and it was too early to comment on it. He said the situation in Ukraine is likely to be a ‘game changer’ and that he will be with us for a very long time. Chairman Powell will appear before the Senate Financial Services Committee hearing on the 3rd.
