Interest rates in U.S. likely to move higher than first anticipated: Fed chair
“The latest economic data have come in stronger than expected, which suggests that the ultimate level ofis likely to be higher than previously anticipated,” Powell says in the testimony to the Senate Banking Committee. “If the totality of the data were to indicate that faster tightening is warranted, we would be prepared to increase the pace of rate hikes.”
The Fed raised its benchmark rate by a quarter-point in early February after imposing a half-point increase in December and four three-quarter-point hikes before that. Over the past year, the central bank has raised its key rate, which affects many consumer and business loans, eight times.U.S. Fed raises key rate, signals more to come even as inflation slows
Most economists and Wall Street investors had expected the Fed to carry out another quarter-point increase when it next meets March 21-22. But in recent days, traders have been pricing in a greater likelihood of a half-point increase, according to futures markets. Powell’s comments suggest a half-point increase in March is possible.In his prepared remarks Tuesday, Powell walks back some of the optimistic comments about declining inflation he had made after the Fed’s Feb.
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