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Federal Reserve chair Jerome Powell after implementing another 0.75 percentage point rate increase, disappointed again by suggesting that more big interest rate hikes may be coming, even though the Fed may slow the pace of those increases.
Fed Chair Jay Powell conceded that the chances of a “soft landing” for the economy are lower now, adding that it’s proven to be more difficult than expected for the Fed to get a handle on inflation.
Powell said “We think we have a ways to go, we have some ground to cover with interest rates,” he continued, “before we get to that level of interest rates that we think is sufficiently restrictive.”
“The tone of Fed Chair Jay Powell’s comments was quite hawkish, which means the Fed still has a way to go to fight inflation, and the level of interest rates will be higher than previously expected,” said Jack McIntyre, portfolio manager at Brandywine Global.
Outside the United States, many other major central banks are also rapidly raising rates to try to cool inflation levels that are even higher than in the U.S.
Stocks closed lower in a volatile trading session after Fed hinted at its intentions to continue interest rate hiking.
Powell effect on stock market saw, The Dow Jones Industrial Average slid more than 500 points, or 1.55%. The S&P 500 sank 2.5%, while the Nasdaq Composite slid 3.36%.
