Federal Reserve Chair Jerome Powell has stated that the central bank may need to raise interest rates further to ensure that inflation remains limited. While the US economy has been performing better than expected, and inflation has decreased, Powell emphasized that the Fed has not yet determined if its benchmark interest rate is sufficiently high to achieve the target inflation rate of 2%.
Powell also expressed concern over signs that the economy may not be cooling as expected, particularly noting robust consumer spending and a possible rebound in the housing sector. The Fed is committed to decreasing inflation to the target rate and will raise rates further if necessary. Powell’s remarks showed the Fed’s challenges regarding conflicting signals from the economy and the need to strike the right balance in monetary policy.