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Powell: Fed to Act "Strongly" to Bring Down Inflation

Stock Markets Sep 08, 2022 09:49AM ET
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By Scott Kanowsky

Investing.com -- Federal Reserve chair Jerome Powell vowed to press on with the U.S. central bank's fight to cool down red-hot inflation, possibly laying the rhetorical groundwork for another large interest rate rise later this month.

In a closely-watched speech at the Cato Institute's annual monetary conference, Powell said the Fed would act "forthrightly, strongly" in its bid to bring down consumer prices.

"The longer inflation remains above [the Fed's 2%] target, the greater the risk that the public does begin to see higher inflation as the norm, and that has the capacity to really raise the cost of getting inflation down," Powell said. "History strongly cautions against prematurely loosening policy."

Powell added that the Fed would "keep at until the job is done," reiterating a pledge he made in Jackson Hole, Wyoming last month.

His comments come after Fed vice chair Lael Brainard said on Wednesday that the central bank was dedicated to battling inflation "for as long as it takes."

The Fed has already raised borrowing costs by 225 basis points since March. But persistently high inflation, as well as continued job market tightness and the subsequent support it brings to demand, may serve to bolster policymakers' case for keeping rates higher for longer.

The central bank's next scheduled meeting is September 20-21, with more than 80% of traders expecting it to increase rates by 75 basis points for a third time this year, according to the CME's FedWatch tool.

The U.S. 2-Year Treasury Yield, which is highly sensitive to short-term interest rate changes, rose to as high as 3.49% as Powell delivered his remarks, while stock indices on Wall Street traded in the red.

Powell: Fed to Act "Strongly" to Bring Down Inflation
 

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Comments (20)
Vito Tagliano
Vito Tagliano Sep 08, 2022 10:12PM ET
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I don’t think buyers understand “Strongly” means We’re Not Priced in! Market continues fighting the Fed… plus, his keep mentioning Former Chair Paul Volcker, he wreck the stock market by packaging big fat Recession because Markets were pushing back on Fed. Imo
Young Kim
Young Kim Sep 08, 2022 1:30PM ET
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Just raise to 5% now and over with keep threatening keep raising interest.
Erikke Evans
Erikke Sep 08, 2022 1:03PM ET
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Talk is cheap.  Fed as a lot of room to raise while America pays the price for their lateness and lack of diligence.
Sep 08, 2022 11:53AM ET
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Powell will *******every aspect of growth
David Beckham
David Beckham Sep 08, 2022 11:38AM ET
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Fed go to hell
Eero Rintala
Eero Rintala Sep 08, 2022 11:27AM ET
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CPI numbers will be very low, Powell tried to dump the market
Steve Brown
Steve Brown Sep 08, 2022 11:27AM ET
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You could be on target my friend.  Rather scary and uncertain and disordered times we live in.  Can't trust CPI.  1. Home school  2. Grow gardens.
Wj Yap
Wj Yap Sep 08, 2022 11:18AM ET
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Eth: i dont care ur inflation / hawkish, i merge now, cant stop me pump
Clay Douglass
Clay Douglass Sep 08, 2022 11:02AM ET
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buden is the cause, Powell is another liar.
First Last
First Last Sep 08, 2022 11:02AM ET
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Putin  is a major cause of inflation
Connecticut Yankee
A_Jaundiced_Eye Sep 08, 2022 10:59AM ET
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""...Powell said the Fed would act 'forthrightly, strongly'..." Now THAT'S how you bring down inflation: with a THESAURUS !!
First Last
First Last Sep 08, 2022 10:59AM ET
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"forthrightly" &  "strongly" are not synonyms, nor antonyms.
Chad Richer Than You
Chad Richer Than You Sep 08, 2022 10:58AM ET
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As the market "shrugs off" Powell
Steve Brown
Steve Brown Sep 08, 2022 10:58AM ET
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What made the Dow crash $1100 last Friday?
 
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