The Federal Reserve had previously signaled at its policy meeting last month that there would likely be three interest rate hikes this year, with the first coming as soon as March
Stocks were lower ahead of Powell’s testimony—with the Dow Jones Industrial Average down as much as 250 points, but all three indexes pared back losses by midday after his comments.
Powell, who is expected to win a second term as Fed chairman, faced questions at his Senate confirmation hearing about how the central bank will adjust monetary policy to combat inflation. While Powell predicted that supply chain issues would normalize later this year, which should help ease inflationary pressures, he said that the Fed will not be afraid to raise interest rates further than projected if inflation remains high.
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