11:37 PM
Wednesday, December 14, 2022
Cairo- Masrawy:
Jerome Powell, Chairman of the Federal Reserve (the US central bank), said that he believes it is right not to stop raising interest rates, explaining that a rate hike of regarding 50 basis points is still large, and “we still have a way to go.”
Powell added, during a press conference held today, Wednesday, that despite the significant tightening of financial conditions in the past year, the Federal Reserve’s policy is not sufficiently restrictive so far, according to what was reported by CNBC Arabia.
This came following the Federal Reserve announced today, Wednesday, to raise interest rates for the seventh time this year, by an increase of 0.5%, which came according to expectations, so that interest rates would be between 4.25% and 4.5%, which is the highest level in 15 years.
Powell said the labor market remains very constrained, although job creation is down from its levels at the start of the year and inflationary pressures are skewed to the upside, “and we need more evidence of lower inflation.”
And the rate of inflation in America slowed down, during last November, by more than expectations, and the inflation rate recorded 7.1%, compared to 7.7% in October.
Powell emphasized that inflation risks have led to interest rate hikes, and that the Fed still has more work to do
He pointed out that the US economy has slowed sharply since last year, but the Fed believes that interest increases are necessary for monetary policy to become sufficiently restrictive.
Powell explained that the Fed’s decision on the interest rate in February will depend on the financial and economic conditions.