The Federal Reserve Chairman said Thursday that aggressive rate hikes are possible as soon as next month.
Powell said it was appropriate to move a little more quickly to raise interest rates. 50 basis points will be on the table for the May meeting.
Powell's statements are in line with market expectations that the Fed will move more quickly to tame inflation, which is running at its fastest pace in more than 40 years. A percentage point is a basis point.
At its March meeting, the Fed approved a 25-basis-point move, but officials in recent days have said they see a need to move more quickly with consumer inflation running at an annual pace of 8.5%.
The Fed's benchmark overnight borrowing rate is expected to be 2.5% by the end of 2022, according to market pricing.
Powell said the goal was to use the tools they had to get demand and supply back in line. It is going to be very difficult. We are going to do our best to accomplish that.
It is absolutely essential to restore price stability.
Even though inflation was running well above the central bank's 2% longer-run target, the Fed had resisted raising rates. In order to achieve full employment that was inclusive across income, race and gender, the Fed would be content with letting inflation run hotter than normal.
Powell and the Fed officials had insisted that inflation wastransitory and that it would go away when demand for goods and services went down. The Fed has had to change course because of those expectations.
We don't know if the actual inflation peak was in March, so we won't count on it.
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