US Fed says 'soon be appropriate' to raise interest rate

The Federal Open Market Committee provided information on its planned approach for significantly reducing the size of the Fed’s balance sheet.

“With inflation well above 2 per cent and a strong labour market, the Committee expects it will soon be appropriate to raise” its key interest rate, the Fed said in a statement. At a video news conference, Fed chair Jerome Powell said he and other policymakers believe that ‘labour market conditions are consistent with maximum employment’.

Powell said policymakers are ‘of a mind’ to boost the rate in March, ‘assuming conditions are appropriate for doing so’, US media reported.

Powell suggested that the economy can withstand more increases than when the Fed launched its last rate hike cycle in late 2015 amid tepid growth and inflation. That cycle peaked with four quarter-point increases in 2018.

ALCHEMPro News Desk (DS)