Powell acknowledges before the US Congress the possibility of more rate hikes this year

The Chairman of the Federal Reserve, Jerome Powellrecognized this Wednesday that, after the pause in June, during the coming months it is likely that interest rates will continue to rise, an increase that will depend on economic data.

“Almost all of the participants in the Federal Open Market Committee,” the body of the Fed that decides on rate hikes, believe that it will be “appropriate to raise interest rates a little more by the end of the year,” he said in a speech published this week. tomorrow and that he will pronounce in a few hours before the Financial Services Committee of the US House of Representatives.

“We will continue to make our decisions on a meeting-by-meeting basis, based on the totality of incoming data and its implications for the outlook for economic activity and inflation, as well as the balance of risks,” he said.

Like every semester, Powell will appear today in the US House of Representatives and tomorrow he will do the same in the Senate. After delivering the speech, the president of the regulator will submit to questions from the congressmen.

This appearance comes a week after the Federal Reserve decided on June 14 to take a break and not raise interest rates this month.

The pause in interest rates, a temporary measure

Rates thus remain in a range of between 5% and 5.25%, the highest level since mid-2007, after a streak of ten consecutive increases carried out to lower inflation.

In the press conference after the announcement, Powell did not rule out further raising them in the future if necessary and acknowledged that most Committee members believe it is likely that some additional rate hikes will be required this year to bring inflation back to 2%. , a position that today will defend before the Congress.

“We remain committed to bringing inflation down to our 2% target and keeping long-term inflation expectations well anchored. Reducing inflation is likely to require a period of below-trend growth and some easing of labor market conditions,” Powell acknowledged today.

In determining the degree of further policy tightening to achieve that objective, the Committee will take into account the cumulative tightening of monetary policy, the way in which monetary policy affects economic activity and inflation, and economic factors. and financial.