In a closely watched speech at Jackson Hole, Wyoming, Federal Reserve Chair Jerome Powell said the economy has been growing faster than expected and consumers are spending briskly—trends that could keep inflation pressures high.
Most Federal Reserve officials last month still regarded high inflation as an ongoing problem that could require further interest rate increases, according to the minutes of their July 25-26 meeting released Wednesday.
In raising the benchmark short-term interest rate to its highest level since 2001, the Fed provided little guidance about when—or whether—it might hike rates again.
The Federal Reserve’s increase would be its 11th hike in 17 months. As with its previous rate hikes, this one would likely further elevate the costs of mortgages, auto loans, credit cards and business borrowing.
The Federal Reserve launched a new instant payment service Thursday. FedNow allows banks and credit unions to sign up to send real-time payments so they can offer customers a quicker way to send money between banks.
Jim Bullard has spent the last 15 years as president and CEO of the Federal Reserve Bank of St. Louis, making him the longest-serving sitting president of a Federal Reserve bank.
Last month’s progress in easing overall inflation was tempered by an elevated reading of “core” prices, a category that excludes volatile food and energy costs.
Such proposals are likely to face resistance from the banking industry and some congressional Republicans, who argue that the Fed had the necessary tools to prevent the bank collapses but failed to use them.
Speaking on Capitol Hill for a second day, Federal Reserve Chair Jerome Powell said returning U.S. inflation to 2% is crucial to support the long-term health of the U.S. economy.
The contrast between the Fed’s stated concern over still-high inflation and its decision to skip a rate hike has heightened uncertainty about its next moves.
The two days of hearings before Congress will likely focus on the question that consumed the central bank last week: How far and how fast will the Fed raise its key interest rate from here?
Chair Jerome Powell offered a nuanced view Wednesday of how the Federal Reserve intends to address its core challenge at a time when inflation is both way below its peak but still well above the central bank’s 2% target.
The Fed’s move to leave its benchmark rate at about 5.1%, its highest level in 16 years, suggests that it believes the much higher borrowing rates it’s engineered have made some progress in taming inflation.
The Federal Reserve, having raised interest rates at the fastest pace in four decades, is poised Wednesday to leave rates alone for the first time in 15 months to allow time to gauge the impact of its aggressive drive to tame inflation.
An emerging pullback should be welcome news for the Federal Reserve, which has been taking aggressive steps for more than a year to slow the economy enough to bring down inflation.
When the Federal Reserve meets next week, it is widely expected to leave interest rates alone—after 10 straight meetings in which it has jacked up its key rate to fight inflation. But that doesn’t mean its done with hikes.
The resilience of the American labor market continues to complicate the Federal Reserve’s efforts to fight inflation.
The stubbornness of high inflation is dividing the Federal Reserve over how to manage interest rates, leaving the outlook for the Fed’s policies cloudier than at any time since it unleashed a streak of 10 straight rate hikes.
April’s hiring gain compares with 165,000 in March and 248,000 in February and is still at a level considered vigorous by historical standards.
The Federal Reserve said it will consider a range of factors in “determining the extent” to which future hikes might be needed.
