(Reuters) – U.S. central banks must “expeditiously move” in order to reduce too high inflation, Federal Reserve Chair Jerome Powell declared on Monday. Powell also indicated that they could raise interest rates more frequently than normal if it was necessary.

Powell declared that “the labor market is very robust, and inflation are much too high,” in remarks prepared to deliver at the National Association of Business Economics conference. There is a clear need to quickly move to bring the stance in monetary policy back towards a neutral position, before moving to restrictive levels if it is necessary to restore price stability. Story:

STOCKS – The lost a little bit of their gains and fell 0.4%

BONDS – The bond yield rose to 2.2806%, while the yield on 2s was stable at 2.0421%

FOREX: There was no significant change in the index, with a decrease of 0.06%

COMMENTS:

OLIVER PURSCHE, SENIOR VICE PRESIDENT, WEALTHSPIRE ADVISORS, NEW YORK

“It’s Powell’s statement that inflation is ‘much too high.’ Three months ago, it was ‘transitory,’ a month a go it was ‘elevated’ and today it’s ‘much too high.’ That’s a hell of a progression. And the market is trying to figure it out, what those statements mean as it pertains to interest rate hikes and whether it increases the likelihood of a couple of 50 basis point hikes down the road.”

“Having said that, I think it’s incredibly important to remember that on Wednesday, Powell stressed the fact that (the Fed) will continue to course adjust based on economic data. So nothing is written in stone.”

JOE SALUZZI, CO-MANAGER OF TRADING, THEMIS TRADING, CHATHAM, NEW JERSEY

“What’s happening here? The market is reacting to the Fed’s potential hawkishness. But, I don’t see anything novel.”

“This is an oversold market and this quick reaction is based on the headline. Let’s try to digest the headline and find out what he really means. The algorithms move fast and when one moves, all of them move. Volatility spikes in markets. In other words, you get a quick reaction that is sometimes not warranted and my gut would say that this one is not warranted.”