The Federal Reserve will not hesitate to keep raising interest rates until inflation falls in a clear and convincing way, Chair Powell said during an interview with the Wall Street Journal. Powell added that “if that involves moving past broadly understood levels of neutral we won’t hesitate at all to do that” and noticed that the US economy is strong and well positioned to withstand less accommodative monetary policy, tighter monetary policy.
The Federal Reserve raised the target for the fed funds rate by half a point to 0.75%-1% during its May 2022 meeting, the second consecutive rate hike and the biggest rise in borrowing costs since 2000, aiming to tackle soaring inflation. The central bank added that ongoing increases in the target range will be appropriate, with Chair Powell pointing to 50bps hikes in the next couple of meetings.
