Powell Signals Rate Hike as Fed's Policy Focus Shifts to Inflation

BlockBeats News, August 28th, Federal Reserve Chair Powell said on Friday that if policymakers are not confident that inflation is coming down to 2% "at a clear and robust rate," the Fed "has work to do." This suggests that if price pressures do not ease, the Fed's next move could be a rate hike.

Powell made it clear that he still adheres to the Fed's policy path of managing inflation by adjusting interest rates. This significantly increases the likelihood of the Fed raising rates next, which could put him at odds with President Trump, who has long been seeking rate cuts.

This statement essentially eliminates the ambiguity left earlier. At the end of July, during a press conference, Powell declined to provide much response to whether a rate hike is needed to address this year's significant and prolonged inflation, which has been above the Fed's target for more than five years. (FXStreet)