Federal Reserve Chair Jerome Powell on Friday called for more rate tightening to fight inflation, warning that additional rate hikes could be coming.
At the Jackson Hole Symposium, Powell acknowledged that progress has been made, saying the central bank will act carefully moving forward. The chairman said inflation is still above where policymakers feel comfortable as the target is set at 2%. He noted that the Fed will remain flexible and will use economic data to decide the monetary policy.
“We are prepared to raise rates further if appropriate, and intend to hold policy at a restrictive level until we are confident that inflation is moving sustainably down toward our objective,” said Powell at Jackson Hole annual retreat while adding that the economy this year may not be cooling as expected, seeing GDP coming in higher than anticipated. “Recent readings on consumer spending have been especially robust,” the chairman added.
Wall Street, though disappointed, cheered on the Fed’s outlook on economic growth. The Dow Jones rose 0.7% to settle at 34,346.90 points. S&P 500 also gained around 0.7% to close at 4,405.71 points, while the tech-heavy Nasdaq increased 0.9% to 13,590.65 points.