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New Fed Chief Tells Congress, Rates will Continue to Rise, Economy Strong
The new Federal Reserve chair Jerome Powell indicated in his first Congressional testimony that interest rates will continue their gradual rise. The money policy body plans to stick to its course of rate increases because it sees the economy strengthening, and in an effort to maintain the economy’s smooth functioning.
Powell told NPR that “fiscal policy is becoming more stimulative,” in part because of the new tax-cutting law. He predicts rising inflation towards a target stabilization level around two percent.
Congress is paying special attention to Powell’s views on market volatility and a response to recent fluctuations. He replaced Janet Yellen just as turmoil struck the stock market, with major indexes falling more than 10%.
Though since largely recovered, concerned investors perceived his comments as leading to the likelihood that the Fed will raise rates faster. The Fed has signaled three quarter-point rate hikes this year, including the first at the next Fed meeting in March.
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- ◦Economy
