Fed's Powell testifies in the House of Representatives
- We do expect to make policy rate up in a series of rate increases this year
- We expect to move interest rates up in a series of hikes this year.
- It is our plan to return to price stability while supporting continued expansion
- Very important that gets on top of strong, high inflation
- Labor market is extremely strong as well.
- From that standpoint, in a good situation for getting inflation under control.
- Workers will still get good jobs, pay increases for some time.
- Economy can withstand our rate increases. We need to get demand and supply back in alignment
- I expect the Fed funds rate to go up in two weeks, and a series of hikes this year, but given Ukrainian situation we will proceed carefully.
- Neutral rate is somewhere between 2% and 2 1/2%
- We talk about getting to neutral rate of 2% to 2 1/2%, and it may need to go higher than that
- Fed can achieve a soft landing
- Monetary policy works through expectations, rate hikes have already happened in effect and we have to ratify them
- The increases in housing will be much smaller and largely a function of supply and demand.
- As we raise interest rates, mortgages will go up and prices will go up more slowly and demand will decline
- We can only expect future price increases in housing.