The probability of a recession within the next year "is not particularly elevated," Federal Reserve Chair Jerome Powell said during the press conference after the central bank raised its key interest rate by 25 basis points to 0.25%-0.5%.
He cited strong economic growth and an exceptionally strong labor market.
Still, inflation has been more persistent than the policymakers expected, with their average projection at 4.3% at the end of 2022, higher than they projected in December.
"Nobody knows with any certainty where the economy will be one year from now."
We well strive to avoid adding to uncertainty. Determined to take the measures needed to restore price stability.
Powell sees inflation coming down in second half of 2022, with further downward moves in 2023.
Powell says 'every meeting is a live meeting,' and rate hikes larger than 25 basis points are possible.
Fed is 'acutely aware' of need to return to price stability, Powell says.
As he has explained before, the economic projections aren't mapping out a policy path, but how the policymakers expect the economy to unfold. "It's certainly possible to move more quickly as we go through the year."
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