Fed plans to raise rates starting in March to cool inflation
January 27, 2022
WASHINGTON - The Federal Reserve signaled Wednesday that it will begin a series of interest-rate hikes in March, reversing pandemic-era policies that have fueled hiring and growth - and stock market gains - but also stubbornly high inflation.
Chair Jerome Powell said at a news conference that inflation has gotten "slightly worse" since the Fed last met in December. He said raising the Fed's benchmark rate, which has been pegged at zero since March 2020, will help prevent high prices from becoming entrenched.
Seeking to calm fears that higher rates might hurt the economy, Powell said the central bank can manage the process in a way that prolongs growth and keeps unemployment low. "I think there is quite a bit of room to raise interest rates without threatening the labor market," he said.