The U.S. central bank must move 'expeditiously' to bring too-high inflation to heel, Federal Reserve Chair Jerome Powell said on Monday, adding that it could use bigger-than-usual interest rate hikes if needed to do so.
U.S. Federal Reserve Chairman Jerome Powell testifies during the Senate Banking Committee hearing titled "The Semiannual Monetary Policy Report to the Congress", in Washington, U.S., March 3, 2022. Tom Williams/Pool via REUTERSMarch 21 - The U.S. central bank must move "expeditiously" to bring too-high inflation to heel, Federal Reserve Chair Jerome Powell said on Monday, adding that it could use bigger-than-usual interest rate hikes if needed to do so.
Fed policymakers last week raised interest rates for the first time in three years and signaled ongoing rate hikes ahead. Most of them see the short-term policy rate - pinned for two years near zero - at 1.9% by the end of this year, a pace that could be achieved with quarter-percentage-point increases at each of their next six policy meetings.
Inflation by the Fed's preferred gauge, however, is three times the central bank's 2% goal, pushed upward by snarled supply chains that have taken longer to fix than most had expected and that could get worse as China responds to new COVID-19 surges with fresh lockdowns. Last year, the Fed repeatedly forecast that supply chain pressures would ease and then was repeatedly disappointed.
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