Powell set to raise interest rates by half a percentage point

Federal Reserve officials have suggested that the central bank may raise its reference rate by half a percentage point at the meeting of the Federal Open Market Committee 3-4. May.

Aggressive action now will help the central bank tame excess demand levels, many Fed officials believe, although some observers worry that the labor market could suffer and a recession could take place.

While a number of central banks have expressed support for half a percentage point higher, even the most hawkish Fed officials do not see a need for a larger interest rate hike than that.

Here is an overview of recent comments from central bankers.

Chairman Jerome Powell (April 21 The International Monetary Fund Panel)

“In my opinion, it is appropriate to move a little faster, and I also think there is something in the idea of ​​front-end-loading the accommodation you think is appropriate, so that it points in the direction of 50 basis points on the table. Of course, we make these decisions at the meeting, and we make them meeting by meeting, but I would say that 50 basis points will be on the table for the May meeting. “

Governor Lael Brainard (WSJ interview April 1[ads1]2)

– When it comes to exactly what the right pace in that set of policy rate increases is from meeting to meeting, I not only want to focus on that, but I just want to say that the combined effect will bring politics to a more neutral stance soon later this year.”

Governor Christopher Waller (April 13, CNBC)

“I prefer a front-loading approach, so a 50-basis hike in May will be consistent with that, and possibly more in June and July.”

New York Fed President John Williams (April 14, Bloomberg Television)

An interest rate increase of 50 basis points in May is “a very reasonable alternative … From a monetary policy point of view, it makes sense for us to move quickly towards more normal levels of the federal fund interest rate.”

Cleveland Fed President Loretta Mester (April 22, CNBC)

“I would support this point, given where the economy is, a 50 basis point increase in May and a few more to get to the two and a half percent-[point] level by the end of the year. “

St. Louis Fed President James Bullard (April 18 virtual performance)

“Not all hope is out here. I think we are in a position where we can maintain credibility and get lower inflation, but when it comes to an interest rate increase of 75 basis points in May, that action is “not my base case.”

Kansas City Fed President Esther George (March 30 virtual performance)

“Given the state of the economy, with inflation at 40 years high and unemployment close to record lows, it is appropriate to move quickly to a neutral policy.”

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