Federal Reserve Chair Jerome Powell said inflation remains too high and that bringing it down to the Fed’s target level will likely require a slower-growing economy and job market.
WASHINGTON — Federal Reserve Chair Jerome Powell said Thursday that inflation remains too high and that bringing it down to the Fed's target level will likely require a slower-growing economy and job market.
Last month, Fed officials predicted that they would impose one more interest rate hike before the end of the year, on top of a series of 11 rate increases that have lifted their key rate to about 5.4%, its highest level in 22 years. Economists and Wall Street traders expect the central bank to leave rates unchanged when it next meets in about two weeks.
A string of Fed officials have recently signaled that a rapid increase in longer-term rates, including for the average 30-year fixed mortgage, which is nearing 8%, will likely cool the economy and help slow inflation. This would allow the central bank to stay on hold and observe how growth and inflation evolve in the coming months.
In September, hiring was much greater than had been expected, with the unemployment rate staying near a half-century low. Strong hiring typically empowers workers to demand higher wages, which, in turn, can worsen inflation if their employers pass on the higher labor costs by raising their prices.
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