Bloomberg News reports that Jerome Powell, the Chair Thursday, said that the central bank will be open to raising the interest rates in the future if it feels that this is the way inflation can be tamed.
What Powell Said?
While speaking at a conference that the International Monetary Fund had hosted, he said that if it is found that tightening the policy further will be helpful, it will be willing to do so.
They would continue to tread with care. Also, they would be alert that the risk of being deviated and overtightening would be considered. He stated that also. The Fed has repeatedly raised the rates over the last 18 months. The main objective has been to combat inflation and slow down the economy. Inflation had reached a point that was at an all-time 40-year high.
However, inflation has calmed down since then, dropping to a 3.7% annual surge in September.
Economic Growth and the Job Market
The job market and economic growth have continued to remain strong, interestingly in the context of repeated rate hikes. Also, inflation is yet to plunge further to align with the 2% target of the Fed.
Bloomberg News reports that the central bank preferred not to increase the rates at the last two meetings that were held. It is preferred to keep it steady between 5.25% and 5.5%. But Fed officials and Powell have repeatedly stressed yet another hike in rate, which it hinted might be possible by the year’s end.
