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Powell says Fed is poised to hike interest rates to fight inflation despite Ukraine war, market sell-off

https://www.usatoday.com/story/money/2022/03/02/interest-rates-jfed-2022/9332358002/

Despite Russia’s invasion of Ukraine and a sliding stock market, Federal Reserve Chair Jerome Powell told Congress on Wednesday the central bank plans to raise its key interest rate from near zero this month to fight a historic surge in inflation.

Powell said he'll propose a quarter-point hike, rather than a half-point, suggesting that's likely what the Fed's policymaking committee will approve.

“With inflation well above 2% and a strong labor market, we expect it will be appropriate to raise the target range for the federal funds rate at our meeting later this month,” Powell said at a House financial services committee hearing. "I would say we will proceed cautiously along the lines of that plan."

"I'm inclined to propose and support a 25 basis point rate increase," he added.

He noted, however, the Fed is prepared to possibly lift rates more sharply, depending on the effects of the Ukraine war and other developments.

"Inflation is too high – we understand that," Powell said. "It'll take some time but we're going to get it under control."