New Chair Powell says Federal Reserve on course for rate hikes

Global Business

WASHINGTON, DC – FEBRUARY 27: Federal Reserve Board Chairman Jerome Powell testifies before the House Financial Services Committee in the Rayburn House Office Building on Capitol Hill February 27, 2018 in Washington, DC. Powell testified about the Federal Reserve’s semi-annual monetary policy report to Congress and the state of the economy (Chip Somodevilla/FP)

The new chair of the U.S. Federal Reserve, appeared before Congress on Tuesday – his first time since taking up the post.

Jerome Powell indicated that the handover from the previous chair, Janet Yellen, has been smooth. He did keep open the possibility, though, that he would raise interest rates faster than Yellen might have.

CGTN’s Daniel Ryntjes reports.

Powell acted much like his predecessor, but perhaps a little more upbeat, as the U.S. economy heats up.

“We’ve seen continuing strength in the labor market, we’ve seen some data that will in my case add some confidence to my view that inflation is moving up to target. We’ve seen continued strength around the globe, and we’ve seen fiscal policy becoming more stimulative,” Powell told the House Financial Services Committee.

When he said ‘fiscal’ policy, he’s talking about the central pillar of “Trumponomics” – Congress passing major tax cuts, pumping billions of dollars into corporate America.

Does that mean raising interest rates more than the three times that members of the Federal Reserve’s rate-setting committee indicated in December?

“I think each of us is going to be taking the developments since the December meeting into account and writing down our new rate paths as we go into the March meeting, and I wouldn’t want to prejudge that,” Powell said.

That seems to be a hint that he’s open to an additional rate rise this year, to four in total.

If things do continue to heat up as we’re seeing right now and inflation begins to rise, it will be Powell’s job to pour on some cold water to balance things out, by raising rates even more.

Ray Locker discusses Fed Chair Powell’s testimony and the economy

CGTN’s Rachelle Akuffo spoke with Ray Locker, Washington enterprise editor for USA TODAY, about Federal Reserve Chair Powell and the economy.