Fed reporter Jennifer Schonberger assesses Chair Jerome Powell's comments on the 75-basis point hike.
- So Jen, first give us your highlights here.
JENNIFER SCHONBERGER: Hey. Good afternoon. Yeah, that press conference just wrapped with Fed Chair Jay Powell. The chairman holding the line on inflation, doubling down on his message made at Jackson Hole back in August that the Fed will do whatever it takes until they're confident inflation is under control, even if that means withstanding a bit of pain. Take a listen.
JEROME POWELL: If we want to set ourselves up, really-- really light the way to another period of a very strong labor market, we have got to get inflation behind us. I wish there were a painless way to do that. There isn't. So what we need to do is get rates up to the point where we're putting meaningful downward pressure on inflation. And that's what we're doing.
JENNIFER SCHONBERGER: Chair Powell saying that the Fed has just gotten to a restrictive policy stance, and that they need to get to a meaningful level and hold rates there until inflation comes down. Of course, the Fed raised its benchmark interest rate by 75 basis points today, to a new range of three to three and a quarter. He says they will need to maintain this restrictive policy stance, that it would be a mistake to prematurely loosen policy. They see rates ending the year at 4.4% this year, and next year ending at 4.6%. So still more, quote unquote, "pain" to come.
Powell mentioned that he thinks a soft landing, basically a scenario where the Fed raises rates without causing a recession, remains, quote, "very challenging." He says it will be appropriate at some point to begin slowing down those rate hikes, but they will make those decisions meeting by meeting. So Chair Powell again striking a very tough stance on inflation. Back to you guys.