November 28, 2022

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The Federal Reserve warns of an aggressive trend

The Federal Reserve warns of an aggressive trend

Federal Reserve Chairman Jerome Powell has expressed concern over inflation expectations and announced that it is ready to do anything to curb inflation.

Powell said the bank could raise interest rates significantly and raise interest rates to a relatively high level to cool demand and reduce inflation, which is operating at a pace not seen in 40 years. He added, “There is a need to move quickly to restructure monetary policy to restore price stability.”

The Federal Reserve raised interest rates by a quarter of a point last week, and predicts a six-point increase in interest rates this year.

Powell warned of a more aggressive trend, but would lead to an interest rate system that would slow costs.

When asked what would prevent the Federal Reserve from raising interest rates by half a percentage point at its next May meeting, Powell replied: “Nothing.”

He said the bank has not yet decided on the next tariff hike and will take big action if the authorities think.

“Our expectation this year is that we will see inflation rise in the first quarter and then equalize,” Powell added.

Shares fell 0.6% in response to Powell’s comments, and higher interest rates could lower stock prices as they drag money from risky assets such as stocks to safer havens, raising the cost of borrowing for companies.

Powell said he hoped the central bank would avoid such a decision at this time, as it seeks to reduce demand and reduce rate increases by triggering a recession by frequently raising interest rates.

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