Federal Reserve Chair Jerome Powell said further interest rate hikes could be forecoming as the Central Bank remains committed to bringing inflation down to its 2% target.
In a speech to the Economic Club of New York on Thursday, Powell noted that given the fast pace of the tightening, there may still be “meaningful tightening” in the pipeline.
“We are attentive to recent data showing the resilience of economic growth and demand for labor,” he said, per a copy of his prepared remarks.
“Additional evidence of persistently above-trend growth, or that tightness in the labor market is no longer easing, could put further progress on inflation at risk and could warrant further tightening of monetary policy.”
He said that elevated geopolitical tensions amid the Israel-Hamas war pose risks to global economic activity.
“Our institutional role at the Federal Reserve is to monitor these developments for their economic implications, which remain highly uncertain,” he said. “Speaking for myself, I found the attack on Israel horrifying, as is the prospect for more loss of innocent lives.”
He concluded by stating that, given the uncertainties and risks, the central bank is “proceeding carefully.”
“We will make decisions about the extent of additional policy firming and how long policy will remain restrictive based on the totality of the incoming data, the evolving outlook, and the balance of risks,” he said.
US stocks moved higher following Powell’s comments, with the Dow Jones up 0.3% at 33,773 points, the Nasdaq up 0.4% at 13,364 points, and the S&P 500 up 0.3% at 4,329 points.
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