By Yasin Ebrahim

Investing.com — Federal Reserve Chairman Jerome Powell said  Thursday that a 50 basis-point rate hike was on the table for the May meeting as the central bank aims to step up the pace of monetary policy tightening to curb elevated inflation.  

Powell stated that 50 basis points would be available for May’s meeting during an IMF panel discussion. Powell also supported the Fed Chairman’s suggestion that the central bank should hike aggressively in the wake of tightening, and front load more than 50 basis points at subsequent meetings.    

Powell referenced the minutes of March’s Fed meeting. Powell stated that Powell believed it was appropriate for there be a 50-basis point increase.

The Fed is expected to raise rates 50 basis points each time it meets with traders to try to reduce demand and inflation. This would be well in excess of its 2% target.  

Last week’s data showed that U.S. inflation rose at the fastest rate since 1981. Inflation rose 8.5% in the twelve months that ended March.

There are concerns that Fed may go too far in monetary policy. Many fear this could cause a slowdown and even a recession. However, the Fed chief stressed that they aren’t pursuing a strict monetary policy and want to provide a soft landing.     

“Our goal is to use our tools to get demand and supply back in sync so that inflation moves down and does so without a slowdown that amounts to a recession,” Powell said, though admitted that it was going to be “very challenging.”