Fed’s Powell Keeps Defending High Interest Rates

Speaking to the Economic Club of New York today, Federal Reserve Chair Jerome Powell said that interest rates would have to stay high until official consumer inflation dropped to 2% (although it has already fallen to 3.7% annual rate from 9% early in 2022, and the effects of rate hikes in making inflation decline are considered delayed and uncertain). The Federal Funds rate is now at 5.25%, having been pushed up from zero in a series of increases at least as rapid as any in the Fed’s history. As Powell spoke, the 10-year Treasury rate was reaching 5% in a very rapid and ongoing spike.