Powell sees Fed rate liftoff in March while Ukraine fogs outlook
BNN Bloomberg
Federal Reserve Chair Jerome Powell said the central bank expects to raise interest rates later this month.
Federal Reserve Chair Jerome Powell said the central bank expects to raise interest rates later this month to tackle hot inflation amid a tight labor market while Russia’s invasion of Ukraine has added uncertainty to the U.S. outlook.
“With inflation well above 2 per cent and a strong labor market, we expect it will be appropriate to raise the target range for the federal funds rate at our meeting later this month,” Powell said Wednesday in remarks prepared for his appearance before the House Financial Services Committee. “The process of removing policy accommodation in current circumstances will involve both increases in the target range of the federal funds rate and reduction in the size of the Federal Reserve’s balance sheet.”
The hearing is scheduled to begin at 10 a.m. in Washington.
Powell said the labor market is “extremely tight,” essentially a message to lawmakers that the central bank has met its maximum employment goal in current conditions, which opens the door to its inflation fight. He said employers are having difficulties filling job openings, while workers are quitting and taking new jobs helping wages rise at the fastest pace in years.
“We know that the best thing we can do to support a strong labor market is to promote a long expansion, and that is only possible in an environment of price stability,” Powell said, restating a line he has used several times now that interprets the inflation fight in terms of preserving the expansion.
