Despite Russia’s invasion of Ukraine and a sliding stock market, Federal Reserve Chair Jerome Powell told Congress Wednesday the central bank plans to raise its key interest rate from near zero this month to fight a historic surge in inflation.
Powell said he’ll propose a quarter point, rather a half point, hike, suggesting that’s likely what the Fed’s policymaking committee will approve.
“With inflation well above 2% and a strong labor market, we expect it will be appropriate to raise the target range for the federal funds rate at our meeting later this month,” Powell said at a House financial services committee hearing.
“I’m inclined to propose and support a 25 basis point rate increase,” he added.
He noted, however, the Fed is prepared to possibly lift rates more sharply, depending on the effects of the Ukraine war and other developments.
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