On Wednesday, Fed Chair Jerome Powell reiterated the Fed’s hawkish position by asserting that the institution is “not yet done” raising interest rates to fight inflation.
Fed Chair Jerome Powell stated on Thursday that the Federal Reserve does not yet know when or how much to raise interest rates in the future, but that it anticipates doing so at a “moderate pace.”
As stated by Powell, “We anticipate the moderate pace of interest rate decisions to continue.” We will keep evaluating the incoming data and making adjustments as necessary.
In addition, Powell stated that the Fed won’t be able to reduce interest rates until inflation has fallen considerably, which may take several years. In order to reduce inflation to its objective of 2%, according to Fed Chair Jerome Powell, the Federal Reserve will need to increase interest rates at least twice more this year.
Powell’s remarks made it very clear that the Fed takes inflation seriously and is prepared to take whatever steps are necessary to lower it.
The hawkish monetary policies of the Federal Reserve have contributed significantly to market volatility over the past year, but the US stock markets seemed to have ignored the central bank’s plans to raise interest rates twice more in 2023, supported by recent favorable economic indicators.