(Fed) Federal Reserve Chairman Jerome Powell says the central bank is ready to hike rates in its March 15-16 meeting, with more increases to follow at a faster rate than during the last decade.
Powell says that 2022 is the year the central bank will shift from its previous accommodative policy as it deals with high inflation. The Fed chair said there was room to hike rates without offsetting the labor market.
Powell said the Fed was not likely to give any forward guidance, saying different from the past, the economy is faced with unique challenges now, including tight labor markets and high inflation.
Following Powell’s remarks, analysts project at least one-quarter percentage point rate increase in March while projecting the next rate to occur in early May.
Invesco’s Kristina Hooper says the markets need to prepare for more tightening, with substantial moves expected in the course of the year.
In a further policy tightening move, the Fed also approved one final round of asset purchases, with the aim to end the stimulus program by March.
SPY is down -0.25%, DXY is up +0.32%.
