U.S. Federal Reserve’s Powell: More rate hikes are likely this year to fight still-high inflation

With inflation in the United States still excessive, most Federal Reserve officials expect to raise interest rates further this year, Chair Jerome Powell said in prepared testimony to be delivered to a House committee Wednesday.

“Inflation pressures continue to run high, and the process of getting inflation back down to 2 per cent has a long way to go,” Powell said on the first of two days of semi-annual testimony on Capitol Hill.

Even so, the Fed last week kept interest rates unchanged after 10 straight hikes so it could take time to gauge how higher borrowing rates have affected the economy, Powell said.

The contrast between the Fed's stated concern over still-high inflation and its decision to skip a rate hike has heightened uncertainty about its next moves. The hazier messaging suggests that Powell is seeking to balance competing demands from those Fed officials who want to keep raising rates and others who feel the central bank has done enough.