As inflation continues to remain at dangerously high levels, the Federal Reserve is considering raising interest rates at least two more times by the end of 2023.
According to the Washington Free Beacon, Fed chair Jerome Powell made such a statement on Thursday during remarks at a Banco de Espana conference in Madrid about financial stability. Although he did not clarify when such rate hikes may come, he said that they will most likely happen by the end of the year, since inflation remains above the Federal Reserve’s preferred maximum of 2 percent.
Powell noted that the Federal Reserve still has a “long way to go” in overcoming inflation, which has risen dramatically since Joe Biden took power over two years ago. Despite this, Biden himself and his administration have continued openly promoting his economic policies, dubbed “Bidenomics,” as a success.
Since March of 2022, the Fed has raised interest rates 10 times. Earlier this month, the Fed’s Federal Open Market Committee, which makes decisions on such policies, ultimately decided to leave the current policy rate the same, at a range of approximately 5 to 5.25 percent.
“We made this decision in light of the distance we have come in tightening policy, the uncertain lags in monetary policy, and the potential headwinds from credit tightening,” said Powell. But, he noted, “a strong majority of Committee participants expect that it will be appropriate to raise interest rates two or more times by the end of the year.”
The Federal Reserve estimates that inflation has risen by at least 3.9 percent as of May, compared to the same rate one year earlier. The factors that make up the core index, such as food and gas prices, have risen by at least 4.7 percent.
The Federal Reserve’s next meeting to determine policy, including possible rate hikes, will take place on July 25th and 26th. After that, there will be three more such meetings throughout the year.