Arguing that the U.S. economy “does not work for anyone” without stable prices, Federal Reserve Chairman Jerome Powell pledged to continue the battle against inflation to bring it to the 2% target.
Federal Reserve Chairman Jerome Powell on Tuesday pledged to continue the battle against inflation, arguing that the U.S. economy “does not work for anyone” without stable prices.
Two Fed officials have disclosed that they had pushed for a 50 basis point hike in the Fed funds rate at the February meeting. This has sparked speculation that the central bank could increase the size of the rate hike at their next meeting on March 21-22. “All of that will go into making the decision, which we have not made… about what to do at the March meeting,” Powell said.
The old conventional wisdom had been that the Fed doesn’t like to move the needle on policy and sticks to a consistent pace of hikes. After all, this is a Fed that moved rates up by 25 basis points at 17 straight meetings from 2004-2006.“Powell’s not a framework guy. He doesn’t have a strong preference for them. He tends to have a preference for the data under his feet,” Gapen said.
The stronger-than-expected economic data “suggests that the ultimate level of interest rates is likely to be higher than previously anticipated,” Powell said.
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