Powell says commitment to cooling prices is 'unconditional'

U.S. Federal Reserve Chair Jerome Powell called his commitment to curbing inflation “unconditional” and another of his colleagues backed raising interest rates by 75 basis points again next month.

“We have a labor market that is sort of unsustainably hot and we’re very far from our inflation target,” Powell told the House Financial Services Committee Thursday during his second day of semiannual congressional testimony. “We really need to restore price stability, get inflation back down to 2 per cent, because without that we’re not going to be able to have a sustained period of maximum employment.”

Policy makers raised interest rates by 75 basis points last week and Powell signaled that another move of that size -- or a 50 basis-point increase -- was on the table when they meet again in late July. Fed Governor Michelle Bowman separately told bankers in Massachusetts that she backed raising rates by 75 basis points next month and continuing with hikes of at least 50 basis points after that until price pressures cooled.