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Jerome Powell, chairman of the U.S. Federal Reserve, speaks during a news conference following a Federal Open Market Committee meeting in Washington, D.C., on Wednesday, June 19, 2019.
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Federal Reserve Chairman Jerome Powell said on Wednesday that he’d prefer to let inflation rise and hold above the central bank’s target before considering future interest rate hikes.
“In order to move rates up, I would want to see inflation that’s persistent and that’s significant,” Powell said from a press conference in Washington. “A significant move up in inflation that’s also persistent before raising rates to address inflation concerns. That’s my view.”
Powell cautioned, however, the Fed’s reluctance to hike rates again isn’t a strict, codified rule.
“We haven’t tried to turn it into some sort of official forward guidance,” he explained. “It happens to be my view that that’s what it would take to want to move interest rates up in order to deal with inflation.”
The Fed chair’s comments came minutes after the central bank decided to hold rates steady in its final decision of 2019. It said in its summary of economic projections that in 2020 the Fed sees 2% GDP growth, 3.5% unemployment and 1.9% core PCE rate, the central bank’s preferred inflation gauge.
