Federal Reserve chief Jerome Powell’s inner hawk unfurled its wings again on Wednesday, a day after he told United States lawmakers it is probably time to retire the word “transitory” when describing inflation.In a second day of testimony before Congress on Wednesday, Powell said that even though most economists see price pressures easing by the middle of next year, “We can’t act as if we’re sure of that.” He also noted that “Inflation has been more persistent and higher than we’ve expected.”On Tuesday, US stock markets sold off and the dollar strengthened against other currencies after Powell signalled that the Fed could accelerate its unwinding of bond purchases that have helped keep a lid on long-term interest rates during the coronavirus pandemic. If the Fed does speed up its taper of bond purchases, an interest rate hike could happen sooner than expected.
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