(Reuters) - Federal Reserve Chair Jerome Powell on Friday said the central bank may need to lift interest rates further to finish the job of lowering ...
STORY CONTINUES BELOW THESE SALTWIRE VIDEOS - Federal Reserve Chair Jerome Powell on Friday said the central bank may need to lift interest rates further to finish the job of lowering inflation on a sustained basis.
U.S. GDP grew at a stronger-than-expected 2.4% annualized rate in the second quarter, and data received so far in the third quarter suggests that pace may have accelerated. The Atlanta Fed's GDP Now tool is currently tracking growth in the July-through-September period at 5.9%. That is expected to come down as more data comes in but other forecasts, such as the Blue Chip consensus, have also been trending up since the quarter began.
A key reference point for policymakers is the neutral rate, or the interest rate that neither stimulates nor hinders the economy. Calibrating their policy rate against the estimated neutral rate - which Fed officials as of June estimated at 2.5% - gives officials an idea of just how much pressure they are exerting on the economy."Although inflation has moved down from its peak - a welcome development - it remains too high.
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