The Federal Reserve (Fed) said that raising interest rates will continue to be implemented in its semi-annual Monetary Policy Report sent to Congress in order to combat excessive inflation. The Federal Open Market Committee (FOMC) resumes rate rises at its meetings in December and January. But according to the report. “It thinks continuous hikes with in target range will be prudent” to bring inflation back to its desired level of 2 percent.
In its strongest monetary tightening in decades. The US central bank raised interest rates by a total of 425 bps on 7 separate occasions previous year, including 4 consecutive rises of 75 bps. This was Carrie out to battle record-high inflation. Which by mid-2022 had reached its highest level in more than 40 years.
However, these attempts, the Federal Reserve favoured inflation measure, the core PCE price index, continued to increase. It climbed by 4.7% yearly in Jan, up from a gain of 4.6% in Dec & beyond the market consensus of a 4.3% growth.
The core PCE price index increased by 0.6 percent on a monthly basis in Jan, up from a monthly rise of 0.4% in Dec & higher than the market expectation of a 0.4% growth.
In its report, the Fed stated that it is “acutely aware that rising inflation causes severe hardship, particularly on those least able to absorb the increasing costs of basics.“
Next Monday, Chair Jerome Powell (Federal Reserve) will speak about the central bank’s monetary policy (MP) before the House Financial Services Committee & the Senate Banking Committee.
The hearing will provide legislators a chance to quiz the Federal Reserve about its stance on interest rates & inflation as well as its long-term goals.