JACKSON HOLE, Aug 25 — The US Federal Reserve may need to raise interest rates further to ensure inflation is contained Fed Chair Jerome Powell said today in remarks that balanced declines in the pace of price increases over the past year with the surprising overperformance of the US economy.
The economy continues to grow above trend, Powell said, and if that continues “it could put further progress on inflation at risk and could warrant further tightening of monetary policy.” Powell repeated what has become a standard Fed diagnosis of inflation progress — with a pandemic-era jump in goods inflation easing and a decline in housing inflation “in the pipeline,” but concern that continued consumer spending on a broad array of services and a tight labour market may make a return to 2 per cent difficult.