The Fed: Powell says more strong data like September reports could warrant further interest-rate hikes

by | Oct 19, 2023 | Stock Market

Federal Reserve Chairman Jerome Powell on Thursday said that the central bank is “attentive” to the recent economic data that shows resilient economic growth and demand for labor and if that trend continues, more hikes may be needed. “We are attentive to recent data showing the resilience of economic growth and demand for labor. Additional evidence of persistently above-trend growth, or that tightness in the labor market is no longer easing, could put further progress on inflation at risk and could warrant further tightening of monetary policy,” Powell said in remarks to the Economic Club of New York.

The Fed chairman said the central bank is proceeding carefully and is grappling with “old and new” uncertainties. The central bank is trying to balance the risk of raising interest rates too high with the risk of keeping them too low to bring down inflation. Powell said the Fed was also “attentive” to tighter financial conditions caused by the recent run-up in longer-term bond yields
“Persistent changes in financial conditions can have implications for the path of monetary policy,” Powell said. The Fed has raised interest rates to a level of 5.25%-5.5% over the past 19 months. Powell said the stance of policy is “restrictive” putting downward pressure on economic activity and inflation. He said that the full effect of the rapid rate hikes may also slow the economy in the com …

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