In his first Congressional hearing, Federal Reserve Chairman Jerome Powell revealed that the Fed is ready to increase interest rates higher and faster than previously projected.[0] Powell acknowledged that recent economic data has shown stronger than expected results, which suggests that the ultimate level of interest rates is likely to be higher than anticipated. He noted that if the data indicates faster tightening is warranted, the Fed is prepared to increase the pace of rate hikes. Inflation has slowed from its June peak, but it remains more than triple the Fed’s 2% target.[1] Powell also touched on the importance of raising the debt ceiling and the “same activity, same regulation” principle, as well as the upcoming Job Openings and Labor Turnover Survey, the ADP jobs report, and the Richmond Fed President Tom Barkin’s speech on the labor market. As the Fed meets later this month, investors will be watching to see what action the central bank will take.
0. “CNBC Daily Open: Powell has spoken: Higher rates and quicker hikes are on the table” CNBC, 8 Mar. 2023, https://www.cnbc.com/2023/03/08/stock-markets-powell-says-higher-rates-and-quicker-hikes-are-possible.html
1. “Takeaways from Powell’s congressional testimony” CNN, 7 Mar. 2023, https://www.cnn.com/2023/03/07/economy/powell-congressional-testimony-inflation/index.html