Fed's Powell testifies in the House of Representatives
- We need to move away from highly stimulative monetary policy settings
- Mortgage rates going up will probably begin to cool off housing demand
- Housing inflation is a significant part of the CPI
- Our policies cannot affect supply-side conditions.
- US economy is very strong. Labor market is extremely tight
- Inflation is well above target.
- We will you flexible in raising interest rates and months ahead.
- Before Russian invasion, Fed was set to raise interest rates in March with every meeting live
- We will proceed carefully in light of Ukraine war
- There could be effects on spending already affects on commodities
- we can't know how large were related effects will last.
- I do think still appropriate to raise interest rates by 25 basis points in March
- Fed will not finalize balance sheet plan at this meeting.
- If inflation/growth persists, we would be prepared to move more aggressively with a 50 basis point rise at a meeting or meetings
- There needs to be congressional action on crypto currencies
The initial comments suggest the Fed will indeed raise rates by 25 basis points but would increase that to 50 basis points if needed. The Fed will move carefully.