Fed Chair Jerome Powell signaled that the central bank might raise the interest rate higher at its next meeting than previously expected as it continues to fight inflation.
While addressing the Senate Banking, Housing, and Urban Affairs Committee, Powell said the ultimate interest rate level would likely be higher than anticipated due to the latest economic data.
- In December, Fed officials had projected they would raise rates to a range between 5% and 5.5% and hold it at that level into 2024.
- As the economy and the job market have remained strong, the Fed plans to submit its new interest rate projects at its March 21-22 meeting.
- Powell said the central bank would pay close attention to Friday’s February jobs report and next week’s February inflation report.
- Last month, the Fed raised its benchmark interest rate by 25 basis points to bring the rate to a range between 4.5% and 4.75%.
- U.S. stocks fell on Tuesday following Powell’s remarks; the Dow lost 575 points or 1.72%.
- The S&P 500 fell 1.53%, and the Nasdaq fell 1.25%.
