More Fed Hikes Up Even As Economic Woes Ease: Powell

The continued strength of the US economy could require further interest rate increases, Federal Reserve Chair Jerome Powell said Friday in a closely watched speech that also highlighted the uncertain nature of the economic outlook, Christopher Rugaber reported for the Associated Press (AP).

Powell’s speech, at an annual conference of central bankers in Jackson Hole, Wyoming, highlighted the uncertainties surrounding the economy and the complexity of the Fed’s response to it. I Photo: The Economic Club of Washington, D.C. Facebook

Powell noted that the economy has been growing faster than expected and that consumers have kept spending briskly — trends that could keep inflation pressures high.

He reiterated the Fed’s determination to keep its benchmark rate elevated until inflation is reduced to its 2% target. “We are attentive to signs that the economy may not be cooling as expected,” Powell said.

“We are prepared to raise rates further if appropriate and intend to hold policy at a restrictive level until we are confident that inflation is moving sustainably down toward our objective.”

“Although inflation has moved down from its peak — a welcome development — it remains too high.”

Powell’s speech, at an annual conference of central bankers in Jackson Hole, Wyoming, highlighted the uncertainties surrounding the economy and the complexity of the Fed’s response to it.

It marked a contrast to his remarks here a year ago, when he bluntly warned that the Fed would continue its campaign of sharp rate hikes to rein in spiking prices.

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