The Federal Reserve believes two more rate hikes this year could get the United States toward a "restrictive stance" to fight inflation, Chairman Jerome Powell said Wednesday after the central bank announced its smallest rate increase in almost a year as price pressures cooled
WASHINGTON (Pakistan Point News / Sputnik - 02nd February, 2023) The Federal Reserve believes two more rate hikes this year could get the United States toward a "restrictive stance" to fight inflation, Chairman Jerome Powell said Wednesday after the central bank announced its smallest rate increase in almost a year as price pressures cooled.
Since March 2022, the Fed has added 425 basis points to rates which stood at just 25 basis points just after the outbreak of the coronavirus pandemic.
"So, we raised rates to 4.5 percentage points, and we are talking about a couple more rate hikes to get to the level we think is appropriately restrictive," Powell told a news conference.
The Fed's target for inflation is a mere 2% per year. Inflation, as measured by the Consumer Price Index, rose by 6.5% in the 12 months to December � at least three times above the central bank's target. But that was markedly lower than the 9.1% annual growth in June, when inflation stood at four-decade highs after trillions of dollars of government relief spending during the pandemic.
