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Fed may need more aggressive interest rate hikes, Powell says

Recent data on inflation, employment, spending and manufacturing shows a hotter economy than officials expected, the central bank chair told Congress. The Fed’s next meeting is in two weeks.

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Updated March 7, 2023 at 4:01 p.m. EST|Published March 7, 2023 at 10:00 a.m. EST
Jerome H. Powell, chair of the Federal Reserve, speaks during a Senate Banking, Housing, and Urban Affairs Committee hearing Tuesday. (Jabin Botsford/The Washington Post)
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Cooling in the economy appears to have “partly reversed” based on recent data on jobs, consumer spending, production and inflation, Federal Reserve Chair Jerome H. Powell told Congress on Tuesday, suggesting that the central bank could keep raising interest rates more aggressively than expected just a few months ago.

“The latest economic data have come in stronger than expected, which suggests that the ultimate level of interest rates is likely to be higher than previously anticipated,” Powell told the Senate Banking Committee. “If the totality of the data were to indicate that faster tightening is warranted, we would be prepared to increase the pace of rate hikes.”