(Finance) – The head of the American central bank, Jerome Powellspeaking on monetary policy before the Senate Banking Committee, underlined that the peak in interest rates will be “probably higher than expected” and that the Fed is “ready to accelerate” on increases in the cost of money if economic conditions so they will allow.
Powell continued his testimony stating that to give price stability”a restrictive policy will be needed for some time” and that continued increases “are appropriate” to bring inflation back towards the 2% target. The central bank will therefore decide “meeting by meeting”, i.e. assessing the situation from time to time at each meeting.
There is still “work to be done” – Powell underlined – adding that “without price stability, the economy “doesn’t work for anyone”.
The prospect of a more “hawkish” Fed that could raise rates more widely and for longer than expected, given the strength of the US economy, leads the American markets to accelerate downwards and so also the European stock exchanges. On the currency market, bullish leap of the dollarwith the euro dropping below 1.06 against the US currency.