Ian Patrick, FISM News
The Federal Reserve is continuing its efforts to tackle 40-year high inflationary prices with another big hike to its federal funds rates.
During a press briefing on Wednesday, Fed Chair Jerome Powell said that federal funds rates would be hiked by another three quarters of a percentage point by November 3. In addition, Powell noted there would likely be future hikes.
“With today’s action, we’ve raised interest rates by three and three quarters percentage points this year. We anticipate that ongoing increases in the target range for the federal funds rate will be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive to return inflation to 2 percent over time,” Powell said.
“Our overarching focus is using our tools to bring inflation back down to our 2 percent goal and to keep longer term inflation expectations well anchored.”
Powell mentioned that the increases will continue as necessary. “The question of when to moderate the pace of increases is much less important than the question of how high … and how long to keep monetary policy restrictive,” Powell said.
According to the FOMC statement released by the Federal Reserve, in addition to the percentage hike, “the Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities.”
The statement comments on the state of inflation as well, saying it “remains elevated, reflecting supply and demand imbalances related to the pandemic, higher food and energy prices, and broader price pressures.”
The statement also places blame for inflation on Russia’s war in Ukraine, saying that it is “creating additional upward pressure on inflation and are weighing on global economic activity.”