Powell: If required, Fed will hike interest rates as fast as practically possible

Fed Chair Jerome Powell said in his post-FOMC meeting press conference on Wednesday that the Fed will move interest rates higher as quickly as it practically can and will move rates beyond the neutral rate if required. We will not let high inflation become entrenched, he said.

Key remarks:

“Nothing in our framework has caused us to wait longer than we would have.”

“You can’t blame the framework, it was a sudden burst of inflation.”

“The labour market has a lot of momentum and the underlying economy is strong.”

“I expected bottlenecks to get better, but they haven’t.”

“The goal is to restore price stability and sustain a strong labor market.”

“Price stability is an essential goal.”

“Price stability is a pre-condition for a strong labor market.”

“The economy can handle tighter monetary policy.”

“We are fully committed to bringing inflation back down.”

“High inflation takes a toll on everyone.”

“We anticipate inflation will move back down.”

“I expect demand to slow enough to better match supply.”

“Our plan is to bring inflation down over time.”

“We are strongly committed to not allow high inflation to become entrenched.”

“The way we do that is by raising interest rates and shrinking the balance sheet.”

“The good news is that the economy and labor market is quite strong, can handle interest rate increases.”

“We believe our policy is the appropriate one.”

“Sanctions are the business of elected officials.”

“Wages moving up is a great thing.”

“Wage increases are well above what’s consistent with 2% inflation over time.”

“We don’t see an entrenched wage-price spiral.”

“I don’t see too-high wage increases becoming entrenched.”

“There is a misalignment of supply and demand in labor market.”

“We need to use our tools to guide inflation back down to 2%.”

“We think the labor market can handle tighter monetary policy.”

“Wages are moving up faster than what is consistent with 2% inflation.”

“Current wage growth isn’t sustainable.”

“We do expect people to come back into the labor market.”

“We expect people will come back to the labor market as Covid-19 becomes less of a factor.”

“In hindsight, it would have been appropriate to move earlier, if we knew then what we know now.”

“The committee is very focused on using tools.”

“No one wants to have to put restrictive policy to bring inflation down.”