Jerome Powell, Other Central Bank Heavyweights Foresee More Rate Hikes

Jerome Powell, Chair of the Federal Reserve, spoke at a panel discussion at the ECB Forum on Central Banking in Sintra, Portugal, highlighting the possibility of additional financial tightening measures. Pointing to the strength of the current labor market, Powell suggested that the existing restrictive policies might not be sufficiently stringent and maintained that they haven’t been in effect long enough to bring about substantial changes. He also kept the door open for consecutive rate hikes in the future.

Joining him on the panel were Christine Lagarde from the European Central Bank (ECB), Andrew Bailey of the Bank of England, and Kazuo Ueda, Governor of the Bank of Japan. Lagarde spoke about the ongoing journey of the ECB in adjusting their rates, hinting towards another probable rate hike in July and insisting that decisions are taken on a per-meeting basis. Bailey emphasized the Bank of England’s commitment to bringing inflation back under control, pointing out the COVID-19 stimulus as a factor in the tight labor market rather than Brexit. In the same vein, Lagarde expressed the ECB’s resolve to persist in their actions to combat inflation, dismissing any thoughts of a break in their efforts.