China News Agency, New York, March 2 (Xinhua) -- Federal Reserve Chairman Jerome Powell said in Washington on March 2 that it would be appropriate for the Federal Reserve to raise the target range for the federal funds rate at its regular monetary policy meeting in March, and he was inclined to support a rate hike that month. 25 basis points.
Powell said at a hearing of the U.S. House of Representatives Financial Services Committee on the same day that the Fed's position is to judge whether to raise interest rates at each regular monetary policy meeting.
At present, the U.S. economy is continuing to recover, and the inflation rate is much higher than the 2% target set by the Fed. He is inclined to propose and support the Fed to raise interest rates by 25 basis points at the regular monetary policy meeting held on March 15-16.
Powell said the current round of rate hikes will be more compact, possibly by 25 basis points every seven weeks.
He expects U.S. inflation to peak and fall this year, but stressed that the Fed is also ready to take more aggressive action if inflation persists, raising the federal funds rate by more than 25 basis points at one or more future meetings.
Asked about the tensions between Russia and Ukraine, Powell said the Fed signaled a rate hike before the escalation in Russia and Ukraine.
The future development of the situation in Russia and Ukraine and the short-term impact of the sanctions on the U.S. economy is "highly uncertain", but the need to withdraw from support policies during the new crown epidemic has not changed. For the upcoming data and the changing economic outlook, The Fed will respond flexibly.
On the issue of shrinking its balance sheet, Powell said the Fed will begin shrinking its balance sheet after the start of the rate hike process and "in a predictable manner."
He expected progress on the balance sheet reduction in March, but would not finalize a specific plan.
The topic of the hearing is the Fed's semi-annual monetary policy report.
In an advance report released last week, the Fed acknowledged that inflation has not eased as expected.
Supply chain disruptions, labor shortages and other issues have contributed to higher prices, the report said.
If the supply bottleneck is resolved, prices will no longer fluctuate significantly.
However, if labor shortages persist and wages grow too fast, inflationary pressures could continue to build.
In November, U.S. President Joe Biden nominated Powell for re-election as Fed chairman, but the Senate has yet to vote on his nomination.
In February, the Fed appointed Powell as interim chairman pending Senate approval.