We may not have gotten a 50 bip hike to start the rate climb, but we could in the coming meeting and then some, according to Federal Reserve Chairman Jerome Powell…
- “If we think it’s appropriate to raise [by a half point] at a meeting or meetings, we will do so…If we determine that we need to tighten beyond common measures of neutral and into a more restrictive stance, we will do that as well,” Powell said during a moderated discussion after a speech on Monday before the National Association for Business Economics in Washington, D.C.
Powell admitted it was a mistake to believe this current price pressure would be relieved as supply chain disruptions were fixed. “That story has already fallen apart…To the extent it continues to fall apart, my colleagues and I may well reach the conclusion we’ll need to move more quickly. And if so, we’ll do so.”
Despite is a more pessimistic view of inflation pressures Powell was still optimistic that a so-called “soft landing” was still possible. “No one expects that bringing about a soft landing will be straightforward in the current context—very little is straightforward in the current context.” Powell noted that monetary policy is a “blunt instrument, not capable of surgical precision,” but that he and his colleagues “will do our very best to succeed in this challenging task.”