Federal Reserve Chairman Jerome Powell delivered a stern commitment Friday to halting inflation, warning that he expects the central bank to continue raising interest rates in a way that will cause 'some pain' to the U.S. economy.
Even with a series of four consecutive interest rate increases totaling 2.25 percentage points, Powell said this is"no place to stop or pause" even though benchmark rates are probably around an area considered neither stimulative nor restrictive to growth.
"We are moving our policy stance purposefully to a level that will be sufficiently restrictive to return inflation to 2%," he said. Looking into the future, the central bank leader added that"restoring price stability will likely require maintaining a restrictive policy stance for some time. The historical record cautions strongly against prematurely loosening policy."
He introduced the speech by noting that his"remarks will be shorter, my focus narrower, and my message more direct." Traders are currently pricing a close call between a half-point and three-quarter point increase. As of Friday morning after Powell's speech, the probability for a 0.75 point move was at 54.5%, according to the CME Group's FedWatch measure.
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