Hike rates

Fed’s Powell to hike rates ‘until the job is done’

Federal Reserve Chairman Jerome Powell makes sure there are no gray areas when it comes to the central bank’s commitment to lower inflation.

“History strongly cautions against premature policy easing,” Powell said Thursday during a question-and-answer session at the Cato Institute. “I can assure you that my colleagues and I are strongly committed to this project, and we will continue until the job is done.”

The Fed has raised interest rates at the fastest pace in decades as it seeks to quell the highest inflation in four decades. Policymakers approved back-to-back interest rate hikes of 75 basis points in June and July and signaled another hike of that magnitude was on the table at their September meeting. There is now an 84% chance of this increase in size on the 21st, according to the CME’s Fed Watch Tool. Another could follow at the November 2 meeting.

FED RAISES INTEREST RATES BY 75 BASIS POINTS IN ANOTHER HISTORIC MOVE TO TACKLE INFLATION

Powell also warned that with rate hikes, the data points would contain key clues.

“Inflation expectations are really important and need to be watched carefully because if they rise they can make the job of returning to price stability much more difficult,” he warned.

“Inflation expectations are really important and need to be watched carefully because if they rise they can make the job of getting back to price stability much more difficult.”

– Federal Reserve Chairman Jerome Powell

US stocks remained volatile before and after Powell’s remarks.

INFLATION CLIMBS 8.5% IN AUGUST

Powell faced widespread criticism for underestimating the rise in inflation in the latter part of 2021, calling it “transitional” before admitting policymakers missed the mark. The Fed has since caught up on its rate hikes, but for some the pace and the plan weren’t enough.

FMR. WHITE HOUSE ECONOMIC ADVISER SPEAKS ON TAX SPENDING PROBLEM

Former Treasury Secretary Larry Summers, a frequent critic of Powell’s, appeared to signal Thursday that the president was now on the right track.

“I’m glad President Powell and his colleagues are now clear that they will do what is necessary to contain inflation,” Summers said in a tweet. “The more determined they seem, the lower the cost of reducing inflation will be.”

Megan Henney of FOX Business contributed to this report.