Fed’s Powell Illuminates Near-Term Rate Path

Federal Reserve Chairman Jerome Powell used the press conference following the Federal Open Market Committee meeting Wednesday to clearly lay out a path for monetary policy in the near term, as he again put the struggle to lower inflation at the forefront of the central bank’s mission.

“Inflation is much too high, and we understand the hardship it is causing,” Mr. Powell said. “We are moving expeditiously to bring it back down. We have both the tools we need and resolve to restore price stability on behalf of American families and businesses.”

After the Fed’s half-percentage-point increase Wednesday, the first move of that magnitude since 2000, “there is a broad sense on the committee that additional 50 basis point increases should be on the table at the next couple of meetings,” Mr. Powell said. But he added the Fed isn’t contemplating something more aggressive: “A 75 basis point increase is not something that the committee is actively considering,” he said.

Mr. Powell expressed confidence the Fed can get inflation down from 40-year highs without a recession. “We have a good chance to have a soft or softish landing,” he said. “The economy is strong and is well-positioned to handle tighter monetary policy.”

But he noted that it’s a challenging outlook for the Fed, officials don’t know how far they’ll need to raise rates, and monetary policy tools are blunt.