Fed Chair Powell Reiterates Need For Gradual Rate Hikes

Investing.com – Federal Reserve Chair reiterated on Tuesday that the U.S. central bank would likely move forward with a gradual increases in interest rates.

“In the FOMC’s view, further gradual increases in the federal funds rate will best promote attainment of both of our objectives.”, Powell said in his first to the House Financial Services Committee since taking over the helm of Fed earlier this month.

Furthermore, Powell promised to continue to strike a balance between avoiding an overheated economy and bringing inflation back near the Fed’s 2% target, while also giving an upbeat outlook for the American economy.

“While many factors shape the economic outlook, some of the headwinds the U.S. economy faced in previous years have turned into tailwinds,” he said.

He further added that, despite recent volatility, financial conditions remained accommodative.

Powell will formally present the testimony to the House Committee at 8:30AM ET (13:30GMT) which will be followed by a question & answer period.

Any additional comments in his responses to Congress will be monitored closely for any further insight on his views on the recent uptick in inflation and how that can potentially affect the Fed’s current rate-hiking path. Investors will also be watching for comments on the markets themselves, in light of the recent bout of increased volatility.

Also of note, two former Fed chairs will make a public appearance Tuesday afternoon. Ben Bernanke interviews will interview Fed Chair Janet Yellen at an event at the Brookings Institution at 2:00PM ET (18:00GMT). It will be Yellen’s first public appearance since leaving her post at the top of the central bank earlier this month.

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