Fed Chair Jerome Powell says higher interest rate hikes could come soon

Powell said on Wednesday that the Federal Reserve’s plan for interest rates hikes is not “preset” and that the Fed could react to new data before its next meeting in two weeks. Powell spoke to House Financial Committee on Wednesday, the day after appearing before the Senate Banking Committee. In both meetings, he discussed persistent inflation and the Fed’s monetary policy. He said the Fed would look closely at data that will be released next week on hiring, retail sales, and inflation.

Why might interest rate hikes get larger? Powell said government data for January showed that inflation was higher than expected at an annualized rate of 6.4 percent. He did acknowledge that inflation had eased since the middle of 2022, of more than 9 percent, but said that much more action would be needed to drive inflation back down to the Fed’s goal of 2 percent.

Dig deeper: Read Jerry Bowyer’s column in WORLD Opinions about the no-confidence vote investors have given to the U.S. economy in 2023.