Federal Reserve Chair Jerome Powell said Tuesday that last week’s booming jobs report underscores why officials expect to approve additional interest rate hikes to tame inflation and similar data in the months ahead could require an even sharper rise in rates than projected.
“It kind of shows you why we think this is a process that will take a significant period of time,” Powell said in a discussion at the Economic Club of Washington, D.C. “I think it underscores the message … that we have a significant road ahead to get inflation down to 2%.”
The Fed last week raised its key short-term interest by a quarter percentage point to a range of 4.5% to 4.75% and Powell said a “couple more” similar hikes were likely, in line with the Fed’s December forecast. That would push the rate to a range of 5% to 5.25% from near zero last March, capping the most aggressive flurry of rate increase in four decades.
Paul Davidson | USA TODAY