Fed: Jerome Powell Says Rate Peak Will Be Higher Than Expected


Jerome Powell, the head of the Fed, speaks today before the Banking Committee of the United States Senate…






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(Boursier.com) – Jerome Powell, the head of the Fed, speaks today before the Banking Committee of the US Senate. He believes that the strength of the economy suggests that the rate peak will be higher than previously expected. Indeed, inflationary pressures are stronger than expected. The magnitude of the price revisions suggests that inflation is higher than expected… The new data therefore suggests that the ultimate level of rates will be “probably higher than previously expected”. If the data warrants it, the US central bank also stands ready to possibly increase the pace of rate hikes. According to Powell, restoring price stability will require a restrictive monetary policy posture for some time.

Jerome Powell says historical data shows the risks of easing monetary policy prematurely. “We will stay the course until the job is done,” assured the leader of the Fed, specifying that the decisions would be taken “meeting by meeting”, and while the full effect of the monetary tightening is not yet feeling. Powell believes that there is still a long way to go to bring inflation under control and that it will probably be strewn with pitfalls. He notes that at the same time, the US job market remains extremely tight.

In another register, Powell also indicates that the Fed is “monitoring the cryptocurrency space”, where there has been “a lot of disruption”.


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