by Ann Sapphire
(Reuters) – The U.S. Federal Reserve (Fed) needs to act “quickly” to rein in too-high inflation and it could, if the situation warrants, resort to bigger-than-usual interest rate hikes, said its president Jerome Powell on Monday.
“The labor market is really strong and inflation is way too high,” he said in a statement prepared for his appearance before the National Association of Business Economics (NABE).
“It is clear that there is a need to act quickly to bring the monetary policy strategy back to a more neutral level, and then to move to more restrictive levels if necessary in order to restore price stability,” he said. he adds.
“If we conclude that it is appropriate to act more aggressively by raising the fed funds rate by more than 25 basis points at a meeting, or meetings, we will do so,” he said. he also indicated.
The Federal Reserve raised its key interest rate by a quarter of a point last week and outlined an aggressive monetary policy tightening strategy this year and next in the face of rising inflation and the war in Ukraine.
Most Fed policymakers consider the “neutral” level for “fed funds” to be between 2.25% and 2.5%.
On the markets, the yield on ten-year US Treasury bonds accentuated its gains after Jerome Powell’s remarks and took 13.3 points to 2.2806% at 5:00 p.m. GMT.
(Report Ann Saphir and Lindsay Dunsmuir; French version Claude Chendjou, edited by Tangi Salaün)
Copyright © 2022 Thomson Reuters