The American central bank (Fed) could, during the next meeting of its monetary committee in early May, raise its key rates more quickly than it did in March, in the face of high inflation, its chairman said on Thursday. Jerome Powell.
A half-percentage-point rate hike “is on the table for the May meeting,” he said in a chat on the sidelines of IMF and World Bank meetings.
In mid-March, the Fed began raising rates to counter high inflation, opting for a quarter-percentage-point hike. These are now within a range of 0.25 to 0.50%.
The Federal Reserve chairman also pointed out that inflation may have peaked in March, “but we don’t know, so we’re not going to count on it.”
“We expected inflation to peak around now and slow down over the rest of the year and then again in 2023. Those expectations have been disappointed in the past, and now we really want to see some real progress,” he explained.
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“We’re also not going to rely on improvement on the supply chain side anymore,” Powell added, although that “would be great” and “extremely helpful in having a soft landing,” it’s that is, to be able to fight against inflation without plunging the economy into recession.