Powell: Further Rate Hikes Possible
The still-robust U.S. economy and tight labor market could mean further interest rate hikes, Federal Reserve Chair Jerome Powell said Thursday, (subscription) reports.
Whats going on: We are attentive to recent data showing the resilience of economic growth and demand for labor, Powell said during a talk at the Economic Club in New York. Additional evidence of persistently above-trend growth, or that tightness in the labor market is no longer easing, could put further progress on inflation at risk and could warrant further tightening of monetary policy.
- The Feds aim in raising rates has been to reduce inflation to 2%.
- Since it began raising rates in March 2022, however, unemployment has stayed largely steady, and economic growth has generally remained above the 1.8% annual growth rate Fed officials see as the economys underlying potential.
A delicate balance: While Powell said there is evidence of a cooling labor market, the Fed must account for new uncertainties and risksincluding the HamasIsrael waras it seeks to balance the threat allowing inflation to rekindle against the threat of leaning on the economy more than is necessary.
- Data since the central banks last meeting, in September, have shown unexpected U.S. job growth and surprisingly strong retail sales, offering inconsistent signals about whether inflation is on track to return to the Feds 2% target in a timely manner.
Hike likely: Most Reuters-polled economists expect the Fed to raise interest rates at its next meeting on Oct. 31Nov. 1. 泭
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