Powell says Fed ‘will not hesitate’ to hike rates further if necessary

Federal Reserve Chair Jerome Powell said Thursday that the central bank “will not hesitate” to raise interest rates further if needed to curb inflation.

“If it becomes appropriate to tighten policy further, we will not hesitate to do so,” Powell said at a conference hosted by the International Monetary Fund. 

“We will continue to move carefully, however, allowing us to address both the risk of being misled by a few good months of data, and the risk of overtightening,” he added.

The Fed has repeatedly raised rates over the last year-and-a-half in an effort to slow the economy and rein in inflation, which reached a 40-year high last summer. Inflation has since cooled, falling to a 3.7 percent annual increase in September.

However, economic growth and the job market have remained surprisingly strong in the face of repeated rate hikes, and inflation has yet to fall in line with the Fed’s 2 percent target. 

“My colleagues and I are gratified by this progress but expect that the process of getting inflation sustainably down to 2 percent has a long way to go,” Powell said at Thursday’s conference.

The central bank opted not to raise rates at its last two meetings, holding steady at a range of 5.25 percent to 5.5 percent. However, Powell and other Fed officials have previously emphasized that another rate hike is still possible before the end of the year. 

“We are making decisions meeting by meeting, based on the totality of the incoming data and their implications for the outlook for economic activity and inflation, as well as the balance of risks,” the Fed chair said, adding, “We will keep at it until the job is done.”