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Federal Reserve Chairman Jerome Powell is keeping the door wide open for another interest-rate increase should inflation stay high and economic growth remain strong.
“If it becomes appropriate to tighten policy further, we will not hesitate to do so,” Powell said in remarks prepared for delivery Thursday afternoon at an event hosted by the International Monetary Fund.
Powell acknowledged that price growth has decelerated in recent months, saying that the Fed was “gratified by this progress” and noting that central bank officials expect economic growth to moderate in the coming quarters as well. But even still, Fed officials are not sure monetary policy is now “sufficiently restrictive,” or tight enough to bring inflation back to its target level of 2% annual growth.
“We are not confident that we have achieved such a stance,” Powell said. “We know that ongoing progress toward our 2 percent goal is not assured.”
Powell’s comments amount to a clear signal that the Fed’s policy-making committee is unwilling to say its rate-hike cycle is finished, despite raising interest rates only once since June. They come off as somewhat more hawkish than his remarks at his most recent press conference on Nov. 1, which were widely interpreted to mean that the central bank was all but certain to hold rates steady for the third straight time when officials next meet on Dec. 12-13.
Write to Megan Cassella at [email protected]
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