By Yasin Ebrahim
Investing.com — Federal Reserve Chairman Jerome Powell said Thursday that a 50 basis-point rate hike was on the table for the May meeting as the central bank aims to step up the pace of monetary policy tightening to curb elevated inflation.
“I would say that 50 basis points will be on the table for the May meeting,” Powell said in an IMF panel discussion Thursday. The Fed chairman also backed the idea of the central bank of hiking aggressively at the start of the tightening cycle, or front loading more than one 50 basis-point hike at future meetings.
Pointing to the minutes of the Fed’s March meeting, Powell said that “many on the committee thought it would be appropriate for there to be one or more 50 basis point hike.”
Traders expect the Fed to hike rates by 50 basis points at each of the next three meetings in an attempt to curb demand, and overall inflation, which is well above the central bank’s 2% target.
Last week’s data showed that U.S. inflation rose at the fastest rate since 1981. It increased 8.5% over the 12 months to March.
Fed’s Powell Says 50 Basis Point Rate Hike for May on the Table