(Bloomberg) — Federal Reserve Chair Jerome Powell stressed that policymakers had not yet made up their minds on the size of their interest-rate increase later this month and said it would hinge on incoming data on jobs and inflation.
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“We have not made any decision about the March meeting,” Powell told the House Financial Services committee on Wednesday during his second day of testimony before Congress.
The Fed chief repeated his message from Tuesday that the US central bank is likely to take rates higher than previously anticipated and that it could move at a faster pace if economic data keeps coming in hot. But on Wednesday he diverged slightly from his prepared remarks to qualify the statement by adding that “no decision” had been made.
“If — and I stress that no decision has been made on this — but if the totality of the data were to indicate that faster tightening is warranted, we’d be prepared to increase the pace of rate hikes,” he said.
‘Important Data’
“We have some potentially important data coming up,” he said, referencing the latest reading on US job openings, released as the testimony began on Wednesday, as well as February’s employment report due Friday and consumer price data scheduled for release March 14.
Fed officials next meet March 21-22.
Investors upped their bets that the central bank could raise interest rates by 50 basis points when it gathers later this month instead of continuing the quarter-point pace from the previous meeting. They also saw the Fed taking rates higher, projecting that the Fed’s policy benchmark will peak at around 5.6% this year, up from 5.5% on Monday.
The Fed began aggressively raising interest rates a year ago, bringing the target on its benchmark rate to a range of 4.5% to 4.75% in February.
The central bank’s goal is to lessen demand for goods and services to cool price growth, but the US economy has been remarkably resilient to higher rates. Payrolls increased by more than 1 million in the three months through January, and recent consumption and inflation data point to persistent price pressures.
–With assistance from Catarina Saraiva and Erik Wasson.
(Updates with more Powell comment in fifth paragraph.)
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