USA news live updates: Powell tells Congress that Fed will raise rates this month – Times of India
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Powell will testify before U.S. lawmakers at 10 a.m. ET (1500 GMT).
In prepared remarks for his testimony to the U.S. House of Representatives Financial Services Committee, Powell reiterated the core Fed narrative that high inflation and an “extremely tight” labor market warrant higher interest rates.
Futures up: Dow 0.3%, S&P 0.2%, Nasdaq 0.1%
Wall Street set for opening gains as Powell says rate hikes on track
Powell acknowledged that consumer price increases have jumped far above the Fed’s target of 2 per cent – inflation hit 7.5 per cent in January compared with a year earlier – and that higher prices had persisted longer than expected.
Powell is betting that with the unemployment rate low, at 4 per cent, and consumer spending healthy, the economy can withstand modestly higher borrowing costs.
When the Fed raises its short-term rate, borrowing costs also typically rise for a range of consumer and business loans, including for homes, autos and credit cards.
A rate hike next month would be the first since 2018.
And it would mark the beginning of a delicate challenge for the Fed: It wants to increase rates enough to bring down inflation, which is at a four-decade high
The Fed is widely expected to raise its benchmark short-term interest rate several times this year beginning with its March 15-16 meeting.
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Powell tells Congress that Fed will raise rates this month
Federal Reserve Chair Jerome Powell made clear on Wednesday that the Fed will begin raising interest rates this month in a high-stakes effort to restrain surging inflation. Read more
