The US Federal Reserve hiked interest rates by 075 points

Fed Chair warns rate cap will be higher than expected

The President of federal reserve from the United States (fed), Jerome Powell, warned that the ceiling that interest rates can reach in the country will be higher than expected based on the latest economic data.

”The data received since our last meeting suggests that the final level of interest rates interest it will be higher than previously expected,” he stressed at a press conference, acknowledging that inflation is still higher than expected.

Powell made the comments shortly after the Fed announced a 0.75 percentage point rate hike, the sixth hike since March and the fourth straight three-quarter-point hike. However, the President is federal reserve it opened the door to the possibility that the next rate hikes will be less than 75 basis points and that could happen “at the next meeting or the next”.

“The time (for small increases) is coming and it may come as early as the next meeting,” which is in December, “or the next, but no decision has been made yet,” said Powell, recognizing; However, that it is still too early to talk about stopping the hikes, as they are still necessary to “reach the sufficiently restrictive level” that would allow them to be moderated inflation.

Powell acknowledged that there is still no scientific way to determine when inflation started, but explained that if the Fed hikes too much, it can always use the tools at its disposal to stimulate inflation. ‘If you go the wrong way and prolong this, (…) there is a risk that this will become entrenched in people’s mindsets,’ and the damage to employment could be much greater, he explained .