U.S. Federal Reserve Chairman Powell
US Federal Reserve Chairman Powell said yesterday (21st) local time that the Fed could move more aggressively to contain high inflation in the US.
"The labor market is very strong, but prices are too high," Powell said in a speech to the National Association of Real Economy.
In particular, he reiterated the possibility of a rate hike, "if the Fed concludes that it is appropriate to move more aggressively by raising rates by more than 0.25 percentage points, we will."
After the Federal Open Market Committee's regular meeting on the 16th, the Federal Reserve decided to raise interest rates from zero to 0.25 percentage points for the first time in three years and three months.
In addition, the year-end interest rate level was expected to be 1.9%, which led to the forecast that the interest rate would be raised by 0.25 percentage points every six meetings remaining this year.
However, Chairman Powell's remarks are interpreted as implying that the rate could be raised by 0.5 percentage points all at once, rather than by 0.25 percentage points.
This perception appears to be due to continued inflation well above the Fed's 2% target, due to supply chain disruptions coupled with COVID-19 and rising energy prices following Russia's invasion of Ukraine.
In fact, the U.S. CPI surged 7.9% last month from a year earlier, recording the largest increase in 40 years.