Mar 29, 2023
Powell Points Republicans to Forecasts Showing One More Hike
(Bloomberg) -- Federal Reserve Chair Jerome Powell, asked in a private meeting with US lawmakers how much further the central bank will raise interest rates this year, pointed to policymakers’ latest forecasts showing they anticipate one more increase, according to Republican Representative Kevin Hern.
Hern is the chairman of the Republican Study Committee, the group of conservatives with whom Powell met on Wednesday. The meeting with the Fed chief had been scheduled prior to the collapse of SVB, a spokeswoman for the group said.
Powell was essentially recapping what policymakers made clear last week when they released new interest-rate forecasts, known as the Fed’s dot plot, following their two-day meeting in Washington.
“The most recent one that they’ve acknowledged is they anticipate one more rate hike this year,” Hern, of Oklahoma, told reporters after the meeting with Powell.
Fed officials raised interest rates by a quarter percentage point, continuing their yearlong fight to cool price pressures despite recent turmoil in the banking system.
The move lifted their policy benchmark to a 4.75% to 5% target range, from near zero in March 2022.
Forecasts released at the same time show the 18 officials expect rates to reach 5.1% by the end of the year, according to their median projection, implying one more 25 basis-point hike.
Powell also told lawmakers it was up to Congress to decide whether to raise the limits on federal deposit insurance, Hern said, but “he thought it would be a great topic to bring up.”
“He did think it was really important for individuals in America, businesses in America, to make sure they thought their money was safe,” he said. “And one way to assure that would be to raise the FDIC limits.”
(Updates with Hern comments in eighth paragraph)
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