Federal Reserve Chair Signals Possibility of Further Interest Rate Hikes

Washington, D.C. – US Federal Reserve Chair Jerome Powell indicated the possibility of more interest rate hikes to combat inflation during his speech at the 24th Jacques Polak Annual Research Conference, hosted by the International Monetary Fund. Powell underscored the uncertain path of inflation and the readiness of the Federal Reserve to tighten policy further if necessary.

According to Philippines News Agency, Powell emphasized the importance of ongoing progress toward the central bank’s 2 percent inflation goal.

Despite improvements in supply and a gradual easing in demand contributing to a better balance in the labor market, Powell noted that the unwinding of pandemic-related distortions is playing a significant role in the decline of inflation. He highlighted a steady fall in wage growth since mid-2022, in line with robust job gains, as indicative of a resurgence in labor supply. Powell also pointed out the strong growth in the US’ gross domestic product (GDP) in the third quarter, with an expectation of moderating growth in the coming quarters. The Commerce Department’s advanced readings showed a 4.9% expansion in the third quarter, exceeding estimates. The Federal Reserve plans to continue making policy decisions carefully, balancing the risks of being misled by short-term data and overtightening. The federal funds rate remains between 5.25% and 5.5%, the highest in 22 years, with the US consumer inflation rate recently climbing to 3.7% in September.