The Clap
Fed Chairman Jerome Powell said the central bank is ready to increase interest rates by 0.5% if necessary to tame soaring inflation.
The deets
His remarks come just a few days after the Fed raised rates by 0.25% & hinted at six more rate hikes throughout 2022. When asked about the possibility of raising rates another 0.5% at the next meeting, Powell confirmed that it is a possibility if the Fed concludes the need for it.
Why this matters
A 0.5% rate hike would be the first of its kind since 2000. And while we already knew the Fed was ready to be more aggressive in curbing inflation, Powell sounded clearly more hawkish yesterday Monday than at last week’s meeting.
Updated projections
Goldman Sachs economists now expect 0.5% rate hikes at both of the Fed’s next two policy meetings in May & June of this year.
