Rate Hikes Could Slow Down from December 2022, says US Federal Chief

According to US Federal Chief Jerome Powell, the Federal Reserve will raise interest rates significantly higher than anticipated and maintain them there for some time. The remarks are meant to emphasize the Federal Reserve’s unwavering focus on tackling stubborn inflation.

Additionally, Jerome Powell gave the impression that the meeting of the US Federal Reserve might see a modest increase in the key interest rate. However, the Federal Chief also emphasized that the smaller increase should not be interpreted as an indication that the Federal Reserve will slow down its efforts to combat inflation anytime soon.

Powell claims that restoring price stability will likely necessitate maintaining restrictive interest rates for some time, and history strongly suggests against loosening policy. In addition, the head of the Fed acknowledged that there had been some encouraging news regarding inflation, with the price of goods like automobiles, furniture, and appliances decreasing.

Despite some developments, Powell maintained that they still have a long way to go in restoring price stability. Before accounting for upcoming inflation, which may have been rising at the fastest rate in four decades, are primarily responsible for driving up service costs.

Jerome Powell added that, in light of the tens of thousands of COVID-19-related deaths, the absence of workers is reflected in an increase in early retirements.