Ting Shen/Bloomberg/Getty ImagesĮlizabeth Warren to Fed chair Jerome Powell: Don't 'drive this economy off a cliff' Powell said the central bank will keep raising interest rates to tame inflation following the steepest hike in almost three decades. Jerome Powell, chairman of the US Federal Reserve, arrives to a Senate Banking, Housing, and Urban Affairs Committee hearing in Washington, D.C., U.S., on Wednesday, June 22, 2022. Market expectations quickly shifted course: By midday Tuesday, CME FedWatch Tool showed a 67.5% probability of a half-point hike at the March 21-22 meeting. “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 latest economic data have come in stronger than expected, which suggests that the ultimate level of interest rates is likely to be higher than previously anticipated,” Powell told lawmakers. In his testimony on Tuesday, Powell said the Fed is prepared to increase the pace of its rate hikes if that continues. The probability of a quarter-point hike was more than 96% in the days that followed, according to the CME FedWatch Tool.īut in the days and weeks that followed, critical economic data came in scorching hot, from the labor market to consumer spending to some inflation metrics. When the Fed wrapped up its policy meeting in early February by enacting a quarter-point interest rate hike - the slowest increase after months of jumbo-sized rates - it was all but certain that the moderated pace would repeat at the central bank’s next meeting. Here are some takeaways from the Senate committee hearing: Federal Reserve Chairman Jerome Powell was on Capitol Hill Tuesday for the first part of his two-day semiannual monetary policy testimony before Congress.Īfter Powell delivered remarks about the economy, inflation and the Fed’s actions to date, the head of the US central bank was peppered with questions from Senate Banking Committee members about a variety of topics including jobs and unemployment, household debt, the debt ceiling, geopolitical uncertainty, climate change, and cryptocurrency.
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