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Federal Reserve Chair Jerome Powell speaks during a news conference in Washington, D.C., July 26, 2023. /CFP
The U.S. Federal Reserve is prepared to raise interest rates higher to bring down inflation, but will proceed "carefully" going forward, Fed Chairman Jerome Powell said Friday.
"We are prepared to raise rates further if appropriate, and intend to hold policy at a restrictive level until we are confident that inflation is moving sustainably down toward our objective," he told the Jackson Hole Economic Symposium in Wyoming.
While not as hawkish a message as he delivered this time a year ago, Powell's remarks still delivered a punch, with investors now seeing one more rate hike by year-end more likely than not.
"We will proceed carefully as we decide whether to tighten further or, instead, to hold the policy rate constant and await further data," Powell said in the keynote address.
After 11 rate hikes in less than 18 months, the U.S. benchmark lending rate now sits at a range between 5.25 and 5.5 percent, its highest level in 22 years.
However, the rapid cycle of interest rate increases has failed to definitively quash inflation, which remains stuck above the Fed's long-term target of 2 percent despite slowing sharply from recent multi-decade highs.
Futures traders currently assign a probability of around 80 percent that the Fed will vote to pause rates at its rate-setting meeting on September 19-20, according to data from CME Group.
(Source: Reuters, AFP)
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Disinformation report hotline: 010-85061466