WASHINGTON: Federal Reserve Chair Jerome Powell on Wednesday gave a clear signal the central bank is ready to raise US interest rates in March for the first time since cutting them to zero when Covid-19 broke out.
"I would say the committee is of a mind to raise the federal funds rate at the March meeting, assuming that conditions are appropriate for doing so," Powell said in an unusually frank comment on the Fed's planned actions. Powell echoed those comments in his press conference, noting that"the drivers of higher inflation" were predominantly due to"the dislocations caused by the pandemic," and"we continue to expect it to decline over the course of the year".
The FOMC provided no time frame but said it"expects that reducing the size of the Federal Reserve's balance sheet will commence after the process of increasing the target range for the federal funds rate has begun".