Jerome Powell hints strong rate hikes to fix inflation.
By The Exchange Team
Jerome Powell, chairman of the Federal Reserve, stated Friday that interest rates will continue to rise to bring inflation down to 2%.
Since the Fed's last policy meeting in July, inflation has slowed. July's CPI climbed 8.5%, down from June's 9.1%.
The Fed's favoured inflation gauge, the PCE price index, rose 6.3% year-over-year in July, down from 6.8% in June.
Powell said one month isn't a trend and the labor market remains solid. Higher rates, slower growth, and a weaker labor market would cut inflation.
The Fed will obtain another month of data before September. August's CPI and jobs figures are due on Sept. 13 and 2.
Powell said, "As monetary policy tightens, it may be necessary to halt rate hikes."
Senior economist Sal Guatieri said, "This may be a hint toward a 3rd straight 75-basis point raise later this month; however, it will mostly depend on the facts."