US Federal Reserve Chair Jerome Powell on Thursday told Congress it’s “too early to say” whether Russia’s invasion of Ukraine will change the bank’s plan to hike interest rates throughout 2022 to fight runaway inflation.
“I do think before the invasion, we were planning to raise rates this year. We were planning to make a series of interest rate increases. That is still the case,” Powell told the Senate Banking Committee on the second day of his semi-annual testimony to Congress.
“I think right now in this very sensitive time, where uncertainty is highly elevated and we really don’t know which way things are going to go, I think we need to move carefully.”
Consumer prices have climbed by rates not seen in four decades over the past year as supply chain snarls dogged the US economy amid its recovery from the Covid-19 pandemic.
Powell and other Fed officials have clearly signaled they will increase interest rates from zero at the March 15-16 meeting of the policy-setting Federal Open Market Committee, ending the easy money policies put in place as Covid-19 broke out.
On Wednesday, Powell had told lawmakers he supports a modest quarter-point percent hike in the Fed’s borrowing rate despite calls from some officials for an increase twice that size to stop inflation, though other hikes are expected later in the year.
