Federal Reserve Board Chair Jerome Powell speaks during a news conference at the Federal Reserve in Washington, DC, today. (Saul Loeb/AFP/Getty Images)
Federal Reserve Chair Jerome Powell said the Fed will probably continue to hike rates for the foreseeable future to combat stubbornly high inflation.
Although inflation has come down significantly over the past several months, it’s still more than double the Fed’s target annual rate of 2%.
“I think it would be very premature to declare victory or think we really got this,” Powell said at a press conference. “The job is not fully done.”
Powell noted that the Fed continues to err on the side of caution on inflation. That means the central bank would rather hurt the economy too much to bring inflation down than take its foot off the rate-hike gas too soon and cause inflation to rise again.
“I continue to think that it is very difficult to manage the risk of doing too little, and finding out in six or 12 months that we actually were close but didn’t get the job done,” Powell said. “We have no incentive or desire to over-tighten, but if we feel we have gone too far … we have tools that would work on that.”