US Federal Reserve Governor
Today, US Federal Reserve Governor Jerome Powell stated the following:
- I do not endorse any specific pricing of interest by the markets.
- Markets have priced the rate hike appropriately given that with inflation rising, it makes sense for the US Federal Reserve to move faster on tightening than last time.
- A 50 basis point interest rate hike is on the table.
- The US Federal Reserve is committed to achieving the 2.0% inflation target.
- Many in the Fed believed that a 50 basis point rate hike would be appropriate to move forward.
- The US economy is very strong and the job market has improved very much.
- The US Federal Reserve is no longer counting on falling inflation once more, as expectations of supply-side easing have been disappointed in the past.
- Of course, it would be great if supply side pressures eased and inflation returned to low.
- The Fed should focus on bringing interest rates back to neutral quickly in order to prepare in either direction.
US Fed member Williams had previously stated that the US Federal Reserve needs to accelerate the pace of interest rate hikes towards neutral levels, and that with inflation so high, the Fed needs to focus on lowering inflation.
He added that the US Federal Reserve needs to move quickly towards normalizing monetary policy, and that it must return to a more neutral level, but the data will guide the timetable for that.
