Powell signals increased rate hikes if economy stays strong
The Federal Reserve could increase the size of its interest rate hikes and raise borrowing costs to higher levels than previously projected if evidence continues to point to a robust economy, Chair Jerome Powell says in prepared testimony to a Senate panel."
WASHINGTON (AP) — The Federal Reserve could increase the size of its interest rate hikes and raise borrowing costs to higher levels than previously projected if evidence continues to point to a robust economy and persistently high inflation, Chair Jerome Powell told a Senate panel Tuesday.
Powell's comments reflect a sharp change in the economic outlook since the Fed's most recent policy meeting in early February. At that meeting, the central bank raised its key rate by just a quarter-point, downshifting after a half-point rise in December and four three-quarter-point hikes before that.
The Fed chair's remarks Tuesday raised the real possibility that the Fed will increase its benchmark rate by a half-percentage point at its next meeting March 21-22. Over the past year, the central bank has raised its key rate, which affects many consumer and business loans, eight times.
