Fed's Powell says further rate hikes likely

2023-07-05 09:56:57

Fed Chairman Jerome Powell told a Bank of Spain event that two more rate hikes this year may be needed to bring inflation down to the central bank’s 2 percent target.
Powell noted that U.S. inflationary pressures continue to rise and there is still a long way to go to return to the 2% target.
Most Fed members see two or more rate hikes needed by year-end.
Powell stressed that the impact of tighter monetary policy will take time to emerge, especially on inflation.
The Fed remains closely watching conditions in the banking sector, particularly in some housing markets and office building valuation adjustments.
Powell said rate hikes may resume after a pause in June, spurred by stronger-than-expected U.S. economic data.
The labor market remains very tight, with the unemployment rate at 3.7%.
Core inflation, while falling, was still above the Fed’s 2% target.
Fed policymakers opted to keep the policy rate target range unchanged at 5%-5.25% in June to assess the impact of rate hikes and banking stress on credit.
Underscoring the likelihood of this trajectory, Powell said most Fed policymakers expect to need at least two more rate hikes by year-end.
The Fed will hold four policy meetings this year, with the next meeting on July 25-26. Traders increased bets on a rate hike in July, pricing in a more than 40 percent chance of a further hike in November. <video src=“https://img-cdn.gateio.im/social/moments-3fb88ef454-701b17ec20-07811d-d72d18-11” controls=“”></video>

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