The Fed paused its aggressive tightening cycle during its last meeting two weeks ago, after 10 consecutive rate hikes, in order to assess the effects of these increases on inflation.
At that meeting, most Fed members indicated they see two rate hikes before the end of the year.
“We believe that new adjustments are coming,” Powell told a meeting of central bankers in Sintra, Portugal, on Wednesday. He also indicated that he does not rule out that it is about consecutive increases.
Powell reiterated that the Fed’s monetary policy will require more time to take effect against strong inflation, and bring it to the agency’s 2% target.
“(Monetary) policy has not been tight enough for long enough,” he added.
On June 14, the Fed decided to leave rates in a range of 5-5.25%, in its first pause since March 2022, after 10 consecutive hikes.
The Fed’s next monetary policy meeting will take place on July 25-26.
Inflation has moderated in the United States, according to government data, but consumers barely notice that reduction and continue to pay exorbitant prices on all products and services.
Brokers assign a greater than 80% chance that the Fed will decide to raise rates by a quarter of a percentage point at its next meeting. That would mean a rate of 5.25-5.5%, the highest in 22 years.
FUENTE: With information from AFP
