The interest rate hike continues until inflation falls

Federal Reserve Chairman Jerome Powell said Tuesday that the US central bank will “continue to push” to tighten monetary policy until it becomes clear that inflation is declining.
“What we need to see is inflation going down in a clear and convincing way, and we’re going to keep pushing until we see that. If we don’t see that, we’ll have to look at moving more aggressively” to tighten financial conditions, Powell told a Wall Street Journal seminar.

Powell said that while the US central bank raises interest rates in its upcoming monetary policy meetings, it will evaluate the data at each meeting to see how the economy and inflation are going.

Annual inflation in the US is currently more than three times the Federal Reserve’s 2% target.

Powell said that if the pace of rate increases did not slow, the Federal Reserve, which has raised its key interest rate by three-quarters of a percentage point this year, would not hesitate to raise rates to tighter levels.

He added, “If this includes exceeding known (neutral) levels in general, we will not hesitate to do so,” referring to the interest rate that neither restricts nor stimulates economic activity.

“We’re going to walk until we feel we’re in a position to say ‘yes, financials are in a good place, and we see inflation going down,'” Powell said. ‭ ‬