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Fed Chair Jerome Powell Warns ‘There’s No Sense That Inflation Is Coming Down’

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Joe Biden

On Wednesday, Federal Reserve Chair Jerome Powell warned that “there’s no sense that inflation is coming down.”

Powell made the comments shortly after the central bank announced a fourth consecutive 0.75 percentage point interest rate hike in an effort to bring down inflation. As explained by CNBC, “By raising its benchmark federal funds rate — the interest rate at which banks borrow and lend to one another — the Fed increases the cost of borrowing for consumers, which, in turn, can cool down inflation. But increased interest rates discourage economic growth, which can trigger a recession in which many people already dealing with rising costs lose their jobs.”

Powell said that current inflation numbers “do suggest to me that we may move to a higher level than we thought at the September meeting,” adding that “there’s no sense that inflation is coming down.”

After the increase, the benchmark federal funds rate is a range of 3.75% to 4%. Powell warned that interest rates could now rise above their previously expected peak of 4.5% to 4.75% in 2023.

Powell added that the Federal Reserve might slow down the pace of hikes as soon as next month, saying, “That time is coming and it may come as soon as the next meeting or the one after that.”

Powell also said that the Fed could potentially slow the pace of hikes as soon as next month, saying, “That time is coming and it may come as soon as the next meeting or the one after that.”

“It’s very premature to be thinking about pausing,” Powell later said. “We have a ways to go.”

“Inflation remains well above our longer run running goal of 2 percent. Over the 12 months ending in September, total PCE prices rose 6.2 percent. Excluding the volatile food and energy categories. Core PCE prices rose 5.1 percent,” he explained.

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