Fed chairman promises cautious approach to inflation
Federal Reserve Chairman Jerome Powell on Thursday told the International Monetary Fund in Washington, D.C., that the Fed would proceed carefully with any future interest rate hikes. He said the Fed could still raise its benchmark interest rates and that inflation had given the central bank and the economy “a few head fakes.” He said the Fed was prepared to raise interest rates “if it becomes appropriate,” implying the Fed doesn’t currently view rate hikes as appropriate.
What would have to change for more interest rate hikes? If inflation continues to resist the Fed’s efforts to use higher interest rates to bring it back down to 2 percent in a timely manner, the Fed could likely employ more interest rate hikes. Powell said the Federal Reserve understands progress toward its goal of 2 percent inflation is “not assured” and said the Fed wouldn’t hesitate to raise rates if needed.
Dig deeper: Listen to Nick Eicher’s conversation with David Bahnsen on The World and Everything in It podcast about the shrinking labor market.
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