Federal Reserve Chair Jerome Powell said the central bank was ready to raise interest rates in March and indicated taking moves in every meeting to tackle inflation.
“The committee is of a mind to raise the Fed funds rate at the March meeting”, if conditions are met, Powell said in a virtual press conference on Wednesday.
Powell was speaking after the Federal Open Market Committee concluded its two-day meeting with a statement that declared “it will soon be appropriate to raise the target range for the federal funds rate,” citing inflation well above its 2 per cent target and a strong job market.
Meanwhile, Fed also said the process of balance-sheet reduction will start after rates are hiked. However, Powell said no timeline has been drawn to start the process.
The yield on 10-year Treasury notes rose sharply as Powell spoke while stocks fell and the dollar pushed higher.
“The tone of Powell’s press conference is hawkish,” said Neil Dutta, head of economic research at Renaissance Macro Research, according to Bloomberg. “The Fed is going to be much more willing to hike faster in the face of upside inflation surprises than ease in the face of downside employment surprises.”
