Between a strong job market and soaring inflation,"there is an obvious need to move expeditiously to return the stance of monetary policy to a more neutral level," Powell said during his Monday address at the Annual Economic Policy Conference of the National Association for Business Economics.The central bank embarked on that journey last week when it announced the first interest rate increase since 2018, raising the benchmark rate to a range of 0.25%-0.5%.
Both Bostic and Powell agree that the central bank will have to be flexible in its approach because much of the economy is in flux.The bank could also opt for a larger rate hike in any given meeting, Powell said, for example by half a percentage-point.Stocks fell following Powell's remarks. The Dow ended the day down more than 200 points, or 0.6.%. That snapped a five-day winning streak. Tech stocks were hit hard too, with the Nasdaq Composite falling 0.4%. Bond yields spiked as well.
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