Fed raises rates
The Federal Reserve raised interest rates by half a point Wednesday marking the largest increase since 2000.
Fed Chairman Jerome Powell says the group’s goal is to slow the inflation rate to about two percent.
“Over the 12 months ending in March, total PCE (consumer prices paid for goods and services) rose 6.6 percent,” Powell said. “Excluding the volatile food and energy categories, core PCE prices rose 5.2 percent.”
He said because the rate hike is a demand side adjustment…
“We can’t affect – really – oil prices, or other commodity prices, or food prices and things like that,” he said.
Powell said Russia’s invasion of Ukraine and recent COVID related lockdowns in China have added to inflation especially for food and energy costs.
“People almost suffer more from food and energy shocks even though they don’t tell us much about the future path,” he said. “So, they’re going to weigh on the process of global supply chain healing which is going to affect broader inflation too.”
Powell suggested further interest rate increases would be coming if inflationary pressures continue at a high rate.
Powell made his comments on a Federal Reserve livestream Wednesday.