Jerome Powell, Chairman of the Federal Reserve Board, speaks during a news conference following a two-day meeting of the Federal Open Market Committee (FOMC) in Washington, U.S. July 27, 2022. Portal/Elizabeth Frantz
Aug 5 (Portal) – Federal Reserve Chair Jerome Powell had a brisk activity with his rate peers a day before the central bank’s June monetary policy meeting, when it made a last-minute move on a larger-than-expected rate hike.
Powell met on Monday the 13th (MID GREENWICH TIME).
The Fed’s policy meeting was held on June 14-15 and its policy decision was released at the conclusion of the meeting on Wednesday, June 15.
Typically, the meetings Powell has with his colleagues leading up to policy meetings are 30 minutes each. Later that day, on June 13, he had a 15-minute meeting with another unnamed board member. It was the first time since April 2021 that he had met more than two policymakers on a Monday before a policy meeting.
That same afternoon, The Wall Street Journal reported that the US Federal Reserve was considering a 75 basis point rate hike, which was interpreted as an informal announcement from the Fed and was the trigger for economists and investors to upgrade their rate hike forecasts to a 75 basis point move.
Fed officials had previously cited a half a percentage point hike as the likely outcome on June 15. The central bank’s own rules prohibit policymakers from publicly commenting on monetary policy in the 10 days leading up to rate-decision meetings.
The Fed finally raised interest rates by 75 basis points at the June meeting, the largest hike in more than a quarter century, as it stepped up its fight to contain inflation at a four-decade high.
After the meeting, Powell told reporters the Fed had been coerced by “rather flashy” inflation expectations data in the past few days, as well as data on price pressures earlier on Friday, and that he had agreed on such an outcome with colleagues ahead of the meeting.
Last week, the Fed raised its federal funds rate by another three-quarters of a percentage point to a target range of between 2.25% and 2.50%. It has hiked that rate by a total of 225 basis points since March in an increasingly aggressive attempt to contain stubbornly high inflation even as recession fears gather pace. Continue reading
Reporting by Lindsay Dunsmuir and Ann Saphir; Adaptation by Leslie Adler
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