Dollar soars on hawkish comments from Fed Chair Jerome Powell. He indicated that ultimate level of interests is “likely to be higher than previously anticipated”. Fed is also “prepared to increase the pace of rate hikes”. He also warned against “prematurely loosening policy.
“The latest economic data have come in stronger than expected, which suggests that the ultimate level of interest rates is likely to be higher than previously anticipated,” Powell said in the prepared remarks for the semi-annual testimony to Congress.
Additionally, “if the totality of the data were to indicate that faster tightening is warranted, we would be prepared to increase the pace of rate hikes,” he added.
“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 emphasized. “Restoring price stability is essential to set the stage for achieving maximum employment and stable prices over the longer run.”
“The historical record cautions strongly against prematurely loosening policy. We will stay the course until the job is done,” he said.
