US Federal Reserve Chairman Jerome Powell’s speech about raising interest rates faster than expected sent stock prices down.
7.3. 21:09
of the United States the central bank will probably have to raise its key interest rates more than expected to tame inflation, said the central bank’s governor Jerome Powell on Tuesday.
Powell will be heard by Congress on monetary policy this week. The event is organized annually.
The rise in interest rates is based on the outlook for the US economy. Too strong economic development can lead to the fact that the rate of price increase does not slow down in accordance with the central bank’s goals. In January, US inflation slowed down less than expected.
“Recent economic data has been stronger than expected, suggesting that the final level of interest rates is likely to be higher than previously expected,” Powell said at the hearing, according to Reuters news agency.
Before Powell speech, the central bank has been expected to keep future interest rate hikes at the level of 0.25 percentage points.
“If the data as a whole indicated that faster tightening is needed, we would be ready to speed up the rate hike.”
After Powell’s speeches, investors’ expectations about the central bank’s interest rate decision in March changed quickly. The majority of investors believe that the central bank will raise key interest rates by 0.5 percentage points.
After the speech, which was watched by investors, the US stock market was clearly in the red.
Powell’s hearing in Congress continues on Wednesday.
#Monetary #Policy #Interest #rates #rise #expected #warns #central #bank
