Washington: Federal Reserve Chairman Jerome Powell clarified on Wednesday that irrigated To curb rising inflation, it will start raising interest rates this month.
In prepared testimony he will give to a congressional committee, Powell warns of the financial consequences of an invasion of Russia. Ukraine are “highly uncertain”.
He says the Fed will “need to be agile” in responding to unexpected changes as a result of war or sanctions. United States of america And Europe has responded.
The Fed is widely expected to raise its benchmark short-term interest rate several times this year, starting with its March 15-16 meeting.
In his testimony, Powell provided a little additional guidance about how quickly the Fed would do so.
The rate hike next month will be the first since 2018. And it will mark the beginning of a delicate challenge for the Fed: It wants to raise rates enough to beat inflation, which is at a four-decade high, but not so fast. To stop growth and recruitment.
Powell is betting that with the unemployment rate low, at 4 percent, and consumer spending healthy, the economy can withstand moderately high borrowing costs.
When the Fed raises its short-term rate, borrowing costs also typically increase for a range of consumer and business loans, including homes, autos and credit cards.
Powell acknowledged that consumer price growth has exceeded the Fed’s target of 2 percent — inflation peaked at 7.5 percent in January from a year earlier — and that higher prices remained in place for longer than expected.
“We understand that high inflation imposes significant hardship especially on those able to meet the high costs of essentials such as food, housing and transportation,” the Fed chair said in its testimony.
Still, he said the central bank expects a gradual decline in inflation this year as entangled supply chains unravel and consumers hold back a bit on spending.
In prepared testimony he will give to a congressional committee, Powell warns of the financial consequences of an invasion of Russia. Ukraine are “highly uncertain”.
He says the Fed will “need to be agile” in responding to unexpected changes as a result of war or sanctions. United States of america And Europe has responded.
The Fed is widely expected to raise its benchmark short-term interest rate several times this year, starting with its March 15-16 meeting.
In his testimony, Powell provided a little additional guidance about how quickly the Fed would do so.
The rate hike next month will be the first since 2018. And it will mark the beginning of a delicate challenge for the Fed: It wants to raise rates enough to beat inflation, which is at a four-decade high, but not so fast. To stop growth and recruitment.
Powell is betting that with the unemployment rate low, at 4 percent, and consumer spending healthy, the economy can withstand moderately high borrowing costs.
When the Fed raises its short-term rate, borrowing costs also typically increase for a range of consumer and business loans, including homes, autos and credit cards.
Powell acknowledged that consumer price growth has exceeded the Fed’s target of 2 percent — inflation peaked at 7.5 percent in January from a year earlier — and that higher prices remained in place for longer than expected.
“We understand that high inflation imposes significant hardship especially on those able to meet the high costs of essentials such as food, housing and transportation,” the Fed chair said in its testimony.
Still, he said the central bank expects a gradual decline in inflation this year as entangled supply chains unravel and consumers hold back a bit on spending.