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Federal Reserve Chair Jerome Powell on Friday said US interest rates may not need to go as high as expected, as stricter lending conditions may help ease inflation pressure.
The Fed has enacted 10 successive rate lifts, upping the federal funds rate range by 500 basis points. Earlier this month, a quarter-point hike to the benchmark rate range to 5.00% to 5.25%.
‘Our policy rate may not need to rise as much as it would have otherwise to achieve our goals,’ Chair Powell said in an event in Washington, DC on Friday,
‘The financial stability tools helped to calm conditions in the banking sector. Developments there, on the other hand, are contributing to tighter credit conditions and are likely to weigh on economic growth, hiring and inflation.’
In the press conference after the Fed’s last decision, Powell strongly hinted at a pause. However, there have been hawkish comments from a number of US central bankers since.
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