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Fed open to speedier interest rates hikes if high inflation persists

by Mike Robinson

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© Reuters. FILEPHOTO: Jerome Powell (US Federal Reserve Chairman) testifies at the Senate Banking Committee hearing, titled “The SemiAnnual Monetary Policy Review to Congress”, Washington, U.S.A. March 3, 2022. Tom Williams/Pool via REUTERS

(Reuters) – Federal Reserve chair Jerome Powell stated Monday that if high inflation does not abate, policymakers at the Fed will reconsider increasing interest rates this year.

Inflation was expected to peak in the first quarter of this year, with then a possible levelling out. The second half would be marked by significant progress. “That story has already fallen apart,” Powell stated at a National Association for Business Economics conference. My colleagues and I might come to the realization that we need to act faster if it continues to crumble.

He stated that, as part of the above policy, they would increase interest rates by 50 basis point at any meeting or other meeting if it was necessary.

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