WASHINGTON: The Federal Reserve will likely need to raise interest rates more than expected in response to recent strong data and is prepared to move in larger steps if the 'totality' of incoming information suggests tougher measures are needed to control inflation, Fed Chair Jerome Powell told US lawmakers on Tuesd
WASHINGTON: The Federal Reserve will likely need to raise interest rates more than expected in response to recent strong data and is prepared to move in larger steps if the"totality" of incoming information suggests tougher measures are needed to control inflation, Fed Chair Jerome Powell told US lawmakers on Tuesday .
While some of that unexpected economic strength may have been due to warm weather and other seasonal effects, Powell said the Fed was cognizant it may also be a sign the US central bank needs to do more to temper inflation, perhaps even returning to larger rate increases than the quarter-percentage-point steps officials had been planning to stick with.
But in either case Powell's comments mark a stark acknowledgement that a"disinflationary process" he spoke of repeatedly in a Feb 1 news conference may not be so smooth. In his testimony, Powell noted that much of the impact of the central bank's monetary policy may still be in the pipeline, with the labour market still sustaining a 3.4 per cent unemployment rate not seen since 1969, and strong wage gains.
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