• Wed. Jun 29th, 2022

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Fed Raises Interest Rates for First Time Since 2018: Latest News – The Wall Street Journal

Federal Reserve Chairman Jerome Powell has wrapped up his post-meeting press conference. Here are a few things we learned:

–The Fed is moving to a more hawkish position, determined to bring down inflation however possible.

–But that won’t happen overnight. Mr. Powell warned that we may see high inflation readings through the middle of the year before they start to come down. That’s partly due to higher gasoline prices and scrambled supply chains—the fallout of Russia’s invasion of Ukraine.

–The Fed is looking to take some of the air out of the labor market. Mr. Powell sees the U.S. economy as not only very strong, but perhaps too strong. The labor market is tight “to an unhealthy level,” he said. And wage increases will need to slow down in order to cool off inflation, he said.

–We could see the Fed announce the process by which it will shrink its $9 trillion balance sheet at its May meeting.