Powell tells Congress that Fed will raise rates this month
ABC News
Federal Reserve Chair Jerome Powell is sending his clearest signal to date that the Fed will begin raising rates this month in a high-stakes effort to restrain surging inflation
WASHINGTON -- Federal Reserve Chair Jerome Powell made clear Wednesday that the Fed will begin raising interest rates this month in a high-stakes effort to restrain surging inflation.
In prepared testimony he will deliver to a congressional committee, Powell cautions that the financial consequences of Russia's invasion of Ukraine are “highly uncertain.” He says the Fed will “need to be nimble” in responding to unexpected changes resulting from the war or the sanctions that the United States and Europe have imposed in response.
The Fed is widely expected to raise its benchmark short-term interest rate several times this year beginning with its March 15-16 meeting. In his testimony, Powell provided little additional guidance about how quickly the Fed would do so.
A rate hike next month would be the first since 2018. And it would mark the beginning of a delicate challenge for the Fed: It wants to increase rates enough to bring down inflation, which is at a four-decade high, but not so fast as to choke off growth and hiring. Powell is betting that with the unemployment rate low, at 4%, and consumer spending healthy, the economy can withstand modestly higher borrowing costs.
