Fed Chairman Powell said they plan to raise rates later this month.
Fed Chairman Jerome Powell, in his presentation to the House of Representatives Financial Services Committee on Wednesday, said a March rate hike would be appropriate as the invasion of Ukraine adds uncertainty to the US economic outlook. In his statement on the subject, Powell used the following statements:
“We think it would be appropriate to raise the interest rate at our meeting this month, given the fact that inflation is well above 2% and a strong labor market. Under current circumstances, the process of ending policy adjustment will involve both an interest rate hike and a contraction of the Federal Reserve balance sheet.”
Powell also sent the message that the labor market is “extremely tight” and that the Fed has reached its maximum employment target. He added that the short-term effects of the occupation of Ukraine, the ongoing war, sanctions and future events on the US economy are rather uncertain.
Rate futures priced in a quarter-point rate hike at the end of this month. However, the details of the downsizing of the balance sheet still remain unclear.
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