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Fed's Powell: Rates likely to go higher than previously anticipated

Published 03/07/2023, 10:24 AM
© Reuters

By Geoffrey Smith 

Investing.com -- U.S. interest rates will probably have to rise further than the Federal Reserve previously thought in order to tame inflation, Fed Chair Jerome Powell said on Tuesday.

"The latest economic data have come in stronger than expected, which suggests that the ultimate level of interest rates is likely to be higher than previously anticipated,"  Powell said In prepared remarks to the Senate Banking Committee at the start of his half yearly testimony to Congress.

Moreover, Powell said the Fed may revert to larger rate hikes again. That would be a sharp reversal of the central bank's actions over the last two meetings when it trimmed the size of its rate hikes from 75 basis points to 25.

"If the totality of the data were to indicate that faster tightening is warranted, we would be prepared to increase the pace of rate hikes," Powell said.

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