Fed Chair Powell in congressional hot seat as sticky inflation squeezes Americans

Powell is slated to appear before the Senate Banking Committee on Tuesday and before the House Financial Services Committee a day later as part of his semi-annual testimony on monetary policy.

“The committee is strongly committed to returning inflation to its 2% objective,” the Fed said in the report to Congress released on Friday. The nation’s central bank indicated that “ongoing increases in the target range will be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive.”

Central bankers are in the midst of the most aggressive campaign since the 1980s to crush persistently high inflation. Although the consumer price index has slowly fallen from a high of 9.1% notched in June, it remains about three times higher than the pre-pandemic average. 

Markets are closely watching Powell for clues over what comes next in the Fed’s inflation fight – including how much higher officials plan to raise rates and what they need to see before stopping the increases.

Officials voted in February to raise the benchmark interest rate a quarter percentage point to a range of 4.5% to 4.75% and signaled that a “couple more” increases are on the table this year. That followed a half-point increase at their December meeting and four consecutive 75-basis-point moves before that.

The Fed’s rate-setting committee meets later this month.