The Federal Reserve The US (Fed, central bank) expects to continue raising interest rates but more slowly, Fed Chairman Jerome Powell said at a congressional hearing on Wednesday.
“Given how far we’ve come, it may make sense to increase rates, but do so at a more moderate pace.”he told the House Committee on Financial Services.
Powell’s comments come a week after the Monetary Policy Committee (FOMC) of the fedin charge of setting the reference rates, will vote in favor of keeping them stable after ten consecutive increases in just over a year.
“Almost all members of the FOMC believe it would be appropriate to raise interest rates a bit more towards the end of the year”, he said on Wednesday.
“We consider it prudent to keep the target range stable to allow the Committee to assess additional information and its implications for monetary policy.”, he added.
The Fed has raised its benchmark rate by five percentage points since March 2022, from near zero to a range between 5.0% and 5.25%.
However, despite these aggressive movements, inflation remains “well above” of the Fed’s long-term target of 2%, considered Powell on Wednesday.
His scheduled appearance before Congress to discuss the semiannual report of the fed on monetary policy gives lawmakers the opportunity to question the most senior central bank official at a time when high interest rates and slowing economic growth are being debated.
Along with its interest rate decision on June 14, the fed it also released updated economic forecasts that suggested another half percentage point of increases may be needed this year.
Source: Gestion
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