Fed's Chairman Jerome Powell has reaffirmed his rhetoric that most central banks worldwide will raise rates twice this year. He also added that the US Federal Reserve may also have to resort to more rate hikes this year at the upcoming meetings.
In simple words, Powell is hinting towards more rate hikes by most central banks around the world for the rest of 2023. Powell expressed these views in an ECB conference where he said how they had come a long way with interest rate policy.
When asked about why the Fed didn't announce a rate rise at the previous meeting, he said it was done to understand the extent of the rate hikes on the US economy.
A Chance of Consecutive Rate Hikes On The Table
A point worth noting was that Jerome Powell said that the Fed has yet to decide about its strategy for future rate hikes. In this regard, he said that the chances of consecutive rate hikes at the upcoming meetings aren't off the table at all.
The next FOMC meeting will take place on the 25th and 26th of July - At the meeting, the chances of a rate hike are very high, especially after the recent comments from the Fed chair and members.
Furthermore, Mr Powell also made it clear that the FOMC clearly believes that more work is required in regard to the rate hikes. With this comment, he has made it clear what the Fed is planning to do in the near future.
In simple words, more rate hikes are guaranteed, but their frequency and timeline are still not unknown. In this regard, both the Fed and the investors appear to be looking at the data.
The comments made by Powell also highlighted how the Fed's #1 priority right now is to work towards brining down the inflationary pressure in the country.