POWELL: FED TO KEEP HIKING RATES UNTIL INFLATION UNDER CONTROL
WASHINGTON — Chair Jerome Powell on Tuesday underscored the Federal Reserve’s determination to keep raising interest rates until there is clear evidence inflation is steadily falling — a high-stakes effort that carries the risk of causing an eventual recession.
The Fed’s increases in its benchmark short-term rate typically lead, in turn, to higher borrowing costs for consumers and businesses, including for mortgages, auto loans and credit cards.
“What we need to see is inflation coming down in a clear and convincing way,” Powell said in remarks to a Wall Street Journal conference. “And we’re going to keep pushing until we see that.”
The Fed chair, who was confirmed last week by the Senate to a second four-year term, suggested that the Fed would consider raising rates even faster if price increases fail to moderate.
“What we need to see,” Powell said, “is clear and convincing evidence that inflation pressures are abating and inflation is coming down. And if we don’t see that, then we’ll have to consider moving more aggressively. If we do see that, then we can consider moving to a slower pace.”
Markets shake off doldrums
NEW YORK — Stocks bounced back after a lackluster start to the week with a broad rally Tuesday as traders got back to buying again after a mostly miserable few weeks on Wall Street.
The S&P 500 rose 2%, with more than 90% of the companies in the benchmark index notching gains.
Big tech stocks led the rally, but smallcompany stocks rose more than the rest of the market, a signal that investors are feeling bullish about the economy.
Investors welcomed an encouraging report on retail sales and reviewed mixed batch of earnings updates from several big retailers.