Powell signals two consecutive rate hikes

US Federal Reserve (Fed) Chairman Jerome Powell has signaled that they are open to two consecutive rate hikes at upcoming meetings. Fed Chairman Powell spoke at a European Central Bank (ECB) forum in Sintra, Portugal. When asked whether Fed officials would hike interest rates at other meetings after leaving them unchanged at their last meeting, Powell said they would not rule out consecutive rate hikes, saying that “may or may not happen.” Powell reiterated that most policymakers expect at least two consecutive rate hikes this year. Fed officials left interest rates unchanged for the first time in 15 months of rate hikes at their last meeting to assess how high borrowing costs and the recent banking crisis were affecting the economy. But Powell and most Fed members signaled that further tightening will ultimately be needed to rein in inflation, which is twice the bank’s 2 percent target. The Fed kept interest rates constant after 15 months The Fed had decided to keep the policy rate constant at 5-5.25 percent after its meeting on June 14 following a 15-month tightening. In the decision text, officials updated interest rate expectations for 2023 upwards, while making upward revisions in economic projections on the growth and inflation side. On the other hand, the expectations reflected in the dot plot also indicated that interest rate hikes were on the table in the coming period. Fed officials' interest rate expectation for the end of the year was determined as 5.6 percent. This was recorded as 5.1 percent in the previous estimate.