Jay Powell is set for a high-stakes appearance before Congress on Tuesday, as the Federal Reserve weighs how aggressively to keep raising interest rates in the face of stubbornly high inflation.
Powell’s testimony before the Senate Banking Committee will be the Fed chair’s first public remarks since troubling inflation data releases showed the central bank is still struggling to cool the US economy despite its year-long campaign of monetary tightening.
The Fed’s main interest rate is at a target range between 4.5 and 4.75 per cent, compared to near-zero at this time last year. But Fed officials have increasingly signalled they will have to lift it more — and keep it higher for longer — to ensure a more rapid decline in inflation towards the central bank’s 2 per cent target.