U.S. Federal Reserve Chair Jerome Powell has signalled that more interest rate increases are likely coming, saying that the current fight against inflation “has a long way to go.”
Speaking before the House Financial Services Committee on Capitol Hill, Powell said that the U.S. central bank’s decision to pause its interest rate hikes earlier in June was likely just a respite rather than a sign the Federal Reserve has ended its monetary tightening regime.
While acknowledging that inflation has cooled considerably in the U.S., Powell stressed that it still “remains well above” the central bank’s 2% target.
“Inflation pressures continue to run high, and the process of getting inflation back down to 2% has a long way to go,” he said.
Federal Reserve officials have indicated that they expect another two 25-basis point interest rate increases this year. The Fed’s benchmark borrowing rate is currently in a range of 5% to 5.25%.
Powell again emphasized that the Federal Reserve is making interest rate decisions based on incoming data and meeting by meeting, rather than on a preset schedule.
Inflation is the U.S. is currently at an annualized rate of 4%, its lowest level in two years.
