The US Federal Reserve needs to act much more forcefully on rising inflation. Federal Reserve Governor Jerome Powell thinks so. However, he scared investors a bit with his speech at a conference in Washington on Monday.
“The labour market is very strong and inflation is too high. If we come to the view that we need to act more aggressively by raising interest rates by more than 0.25 percentage points at future monetary policy meetings, then we will do that,” Jerome Powell said at the annual conference hosted by the National Association for Business Economics.
Reaction of the markets
However, this sent an unexpected signal to markets that had been counting on regular quarter-percentage-point rate increases. Stocks on Wall Street started to fall. The Nasdaq technology index recorded the biggest drop at the start of Monday’s trading, falling 1.2 percent.
Best performance?
The Dow Jones Industrial Average lost less than a percent, while the main S&P 500 index lost about half a percent. US stocks ended last week in plus territory and the last five days were among the best in the year so far.
