The Federal Reserve pointed to an early start to steadily hike interest rates in mid-March, its latest move toward removing stimulus to control inflation.
- Fed Chair Jerome Powell stated the central bank was ready to hike rates at its March 15-16 meeting and could increase them faster than it did over the last ten years.
- In a news conference, Powell stated that this is going to be a year in which we move steadily away from a highly accommodative monetary policy put up to deal with the economic effects of the pandemic.
- Mr. Powell left an opportunity to raise rates at consecutive policy meetings, which are held nearly every six months. That is a move the Fed has not adopted since 2006.
- Mr. Powell’s statements led investors in interest-rate futures markets to fully expect a March rate increase of nearly 0.25 percentage points and a nearly 70% possibility of a second rate hike.
The Fed Chair suggested that the Fed was not likely to provide any forward guidance, a term that describes the intentions with interest rates over the next few years.
DXY up +0.61%, EUR USD down -0.72%
Source: US Federal Reserve
