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Powell: Prep for steeper climb

Federal Reserve Chairman Jerome Powell said Tuesday that if the US job market further strengthens in the coming months or inflation readings accelerate, the Fed might have to raise its benchmark interest rate higher than it now projects.

Powell’s remarks followed the government’s blockbuster report last week that employers added 517,000 jobs in January, nearly double December’s gain. The unemployment rate fell to its lowest level in 53 years, 3.4%.

“The reality is if we continue to get strong labor market reports or higher inflation reports, it might be the case that we have to raise rates more” than is now expected, Powell (right) said in remarks to the Economic Club of Washington.

Stocks closed higher after a choppy trading session as investors digested the comments.

The Dow rose 0.8%, while the Nasdaq gained 1.9%.

Though price pressures are easing and Powell said he envisions a “significant” decline in inflation this year, he cautioned that so far the central bank is seeing only “the very early stages of disinflation. It has a long way to go.”

Last week, the Fed raised its benchmark rate by a quarter percentage point to a range between 4.5% and 4.75%.

BUSINESS

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2023-02-08T08:00:00.0000000Z

2023-02-08T08:00:00.0000000Z

https://nypost.pressreader.com/article/282312504228449

New York Post