{"id":1449478,"date":"2022-04-22T06:47:02","date_gmt":"2022-04-22T10:47:02","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1449478"},"modified":"2022-04-22T06:47:03","modified_gmt":"2022-04-22T10:47:03","slug":"jerome-powell-says-0-5-rate-hike-possible-in-may","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/jerome-powell-says-0-5-rate-hike-possible-in-may\/","title":{"rendered":"Jerome Powell Says 0.5% Rate Hike Possible in May"},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"&quot;\"><div class=\"counts mashsbcount\">18<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Fjerome-powell-says-0-5-rate-hike-possible-in-may%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1449478&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><div class=\"PageBuilder-col-full PageBuilder-col PageBuilder-article\"><\/div>\n<div class=\"PageBuilder-col-full PageBuilder-col PageBuilder-article\">\n<\/div>\n<div class=\"PageBuilder-col-9 PageBuilder-col PageBuilder-article\">\n<div class=\"RenderKeyPoints-keyPoints\" id=\"RegularArticle-KeyPoints-4\" data-test=\"keyPoints-1\" data-analytics=\"RegularArticle-keyPoints-4-1\">\n<div class=\"RenderKeyPoints-wrapper\">\n<div class=\"RenderKeyPoints-list\">\n<div>\n<div class=\"group\">\n<ul>\n<li>Fed Chairman Jerome Powell on Thursday said the central bank is committed to raising rates &#8220;expeditiously&#8221; to bring down inflation.<\/li>\n<li>That could mean an interest rate hike of 50 basis points in May as prices rise at their fastest pace in more than 40 years.<\/li>\n<li>&#8220;It&#8217;s absolutely essential to restore price stability,&#8221; he added.<\/li>\n<\/ul>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"ArticleBody-articleBody\" id=\"RegularArticle-ArticleBody-5\" data-module=\"ArticleBody\" data-test=\"articleBody-2\" data-analytics=\"RegularArticle-articleBody-5-2\">\n<div class=\"group\">\n<p>Federal Reserve Chairman <a href=\"https:\/\/www.cnbc.com\/jay-powell\/\">Jerome Powell<\/a> affirmed the central bank&#8217;s determination to bring down inflation and said Thursday that aggressive rate hikes are possible as soon as next month.<\/p>\n<p>&#8220;It is appropriate in my view to be moving a little more quickly&#8221; to raise interest rates, Powell said while part of an International Monetary Fund panel moderated by CNBC&#8217;s Sara Eisen. &#8220;I also think there is something to be said for front-end loading any accommodation one thinks is appropriate. &#8230; I would say 50 basis points will be on the table for the May meeting.&#8221;<\/p>\n<p>Powell&#8217;s statements essentially meet market expectations that the Fed will depart from its usual 25 basis point hikes and move more quickly to tame inflation that is running at its <a href=\"https:\/\/www.cnbc.com\/2022\/04\/12\/consumer-prices-rose-8point5percent-in-march-slightly-hotter-than-expected.html\">fastest pace in more than 40 years<\/a>. A basis point equals 0.01 percentage point.<\/p>\n<p>However, as Powell spoke, market pricing for rate increases got somewhat more aggressive.<\/p>\n<p>Expectations for a 50 basis point move in May rose to 97.6%, according to the <a href=\"https:\/\/www.cmegroup.com\/trading\/interest-rates\/countdown-to-fomc.html\" target=\"_blank\" rel=\"noopener\">CME Group&#8217;s FedWatch Tool<\/a>. Traders also priced in an additional hike equivalent through year&#8217;s end that would take the fed funds rate, which sets the overnight borrowing level for banks but also is tied to many consumer debt instruments, to 2.75%.<\/p>\n<p>Stocks also fell, sending the Dow industrials <a href=\"https:\/\/www.cnbc.com\/2022\/04\/20\/stock-market-futures-open-to-close-news.html\">down more than 400 points<\/a> and the Nasdaq, with its rate-sensitive tech stocks, lower by more than 2%. Treasury yields pushed higher, with the benchmark 10-year note most recently at 2.9%.<\/p>\n<\/div>\n<div class=\"group\">\n<div class=\"RelatedContent-relatedContent\" id=\"RegularArticle-RelatedContent-1\">\n<div class=\"RelatedContent-container\">\n<div class=\"RelatedContent-nonCollapsibleContent\">\n<h2 class=\"RelatedContent-header\">Stock picks and investing trends from CNBC Pro:<\/h2>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"group\">\n<p>At its March meeting, the <a href=\"https:\/\/www.cnbc.com\/2022\/03\/16\/federal-reserve-meeting.html\">Fed approved a 25 basis point move<\/a>, but officials in recent days have said they <a href=\"https:\/\/www.cnbc.com\/2022\/04\/20\/feds-daly-says-the-economy-can-handle-rate-hikes-but-a-mild-recession-is-possible.html\">see a need to move more quickly<\/a> with consumer inflation running at an annual pace of 8.5%.<\/p>\n<p>&#8220;Our goal is to use our tools to get demand and supply back in synch, so that inflation moves down and does so without a slowdown that amounts to a recession,&#8221; Powell said. &#8220;I don&#8217;t think you&#8217;ll hear anyone at the Fed say that that&#8217;s going to be straightforward or easy. It&#8217;s going to be very challenging. We&#8217;re going to do our best to accomplish that.&#8221;<\/p>\n<p>&#8220;It&#8217;s absolutely essential to restore price stability,&#8221; he added. &#8220;Economies don&#8217;t work without price stability.&#8221;<\/p>\n<p>The Fed had resisted raising rates through 2021 even though inflation was running well above the central bank&#8217;s 2% longer-run target. Under a <a href=\"https:\/\/www.cnbc.com\/2020\/08\/27\/powell-announces-new-fed-approach-to-inflation-that-could-keep-rates-lower-for-longer.html\">policy framework adopted in late 2020<\/a>, the Fed said it would be content with letting inflation running hotter than normal in the interest of achieving full employment that was inclusive across income, racial and gender demographics.<\/p>\n<p>Until several months ago, Powell and Fed officials had insisted that inflation was &#8220;transitory&#8221; and would dissipate as <a href=\"https:\/\/www.cnbc.com\/coronavirus\/\">Covid pandemic<\/a>-related factors such as clogged supply chains and outsized demand for goods over services abated. However, Powell said those expectations &#8220;disappointed&#8221; and the Fed has had to change course.<\/p>\n<p>&#8220;It may be that the actual [inflation] peak was in March, but we don&#8217;t know that, so we&#8217;re not going to count on it,&#8221; he said. &#8220;We&#8217;re really going to be raising rates and getting expeditiously to levels that are more neutral and then that are actually tight &#8230; if that turns out to be appropriate once we get there.&#8221;<\/p>\n<p>These will be Powell&#8217;s last remarks before the May 3-4 meeting of the Federal Open Market Committee, which sets interest rates. He is the latest Fed official to say <a href=\"https:\/\/www.cnbc.com\/2022\/04\/13\/feds-waller-sees-likelihood-of-multiple-half-point-interest-rate-hikes-ahead.html\">rapid action is needed<\/a> to take down inflation.<\/p>\n<p>Along with the rate hikes, the Fed is expected soon to start reducing the amount of bonds it is holding. The central bank&#8217;s balance sheet now stands at close to $9 trillion, primarily consisting of Treasurys and mortgage-backed securities.<\/p>\n<p>Discussions at the March meeting indicated the Fed eventually <a href=\"https:\/\/www.cnbc.com\/2022\/04\/06\/fed-minutes-march-2022-meetings-.html\">will allow $95 billion of proceeds<\/a> from maturing bonds to roll off each month.<\/p>\n<p>Powell noted that the other than pernicious inflation, the U.S. economy is &#8220;very strong&#8221; otherwise. He characterized the labor market as &#8220;extremely tight, historically so.&#8221;<\/p>\n<p>Earlier in the day, he referenced former Fed Chairman Paul Volcker, who battled inflation in the late 1970s and early &#8217;80s with a series of rate hikes that ultimately led to a recession. Volcker &#8220;knew that in order to tame inflation and heal the economy, he had to stay the course,&#8221; Powell said.<\/p>\n<p>The Volcker Fed ultimately took the benchmark rate to nearly 20%; it currently sits in a range between 0.25% and 0.50%.<\/p>\n<\/div>\n<\/div>\n<div class=\"WatchLiveRightRail-inline WatchLiveRightRail-container\" id=\"RegularArticle-WatchLiveRightRail-7\" data-test=\"watchLiveRightRail-4\" data-analytics=\"RegularArticle-watchLiveRightRail-7-4\">\n<div class=\"WatchLiveRightRail-contents\"><a href=\"https:\/\/www.cnbc.com\/live-tv\/\" class=\"WatchLiveRightRail-wlButton\">WATCH LIVE<img decoding=\"async\" src=\"denied:data:image\/svg+xml;base64,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\" class=\"WatchLiveRightRail-logo\" alt=\"logo\" \/><\/a><a href=\"https:\/\/www.cnbc.com\/live-tv\/\" class=\"WatchLiveRightRail-wlButtonMobile\">WATCH IN THE APP<\/a><\/div>\n<\/div>\n<\/div>\n<div class=\"PageBuilder-col-9 PageBuilder-col PageBuilder-article\"><\/div>\n<div class=\"PageBuilder-col-12 PageBuilder-col PageBuilder-article\">\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Fed Chairman Jerome Powell on Thursday said the central bank is committed to raising rates &#8220;expeditiously&#8221; to bring down inflation. That could<\/p>\n","protected":false},"author":498,"featured_media":2315279,"comment_status":"open","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"","fifu_image_alt":"","footnotes":""},"categories":[],"tags":[],"class_list":["post-1449478","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry"],"_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1449478","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/498"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=1449478"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1449478\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/2315279"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=1449478"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=1449478"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=1449478"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}