Federal Reserve Chair Jerome Powell has warned that more interest rate hikes are coming. Indeed, speaking on Friday, the Fed Chair said that interest rate hikes would be needed to continue to combat inflation that remains “too high.”
Although Powell acknowledged that progress has been made, he noted that inflation is still above a comfortable level. Moreover, Powell clearly stated that the Federal Reserve was “prepared to raise rates further” as the fight continued.
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Fed Chair Calls Inflation “Too High” as He Warns of Continued Interest Rate Hikes
The Federal Reserve has been vigilant in a long-standing battle with inflation rates. Although the Fed has enacted a pause on interest rate hikes for the first time in over a year, the central bank leader has warned that the process is likely to resume at some point in the near future.
Specifically, Fed Chair Jerome Powell has said that interest rate hikes are coming as inflation rates remain too high. Moreover, despite making note of economic progress, he noted that inflation rates remain too high for comfort. Subsequently, he stated that the Federal Reserve will embrace malleability as it considers all options moving forward.
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“Although inflation has moved down from its peak—a welcome development—it remains too high,” Powell said, according to CNBC. “We are prepared to raise rates further if appropriate and intend to hold policy at a restrictive level until we are confident that inflation is moving sustainably down toward our objective.”
Additionally, last year, Powell made similar remarks. Then he noted that “some pain was expected as the Fed fought to bring inflation toward its 2% goal. Conversley noted that it is far too soon to end the talk of interest rate hikes. Despite the fact that the data presented this summer has been positive.
“The lower monthly readings for core inflation in June and July were welcome, but two months of good data are only the beginning of what it will take to build confidence that inflation is going down,” Powell added. ” However, he also noted that the risks of doing too much are also present for the Fed. Noting that careful consideration must be emphasized.
