Chairman of the Federal Reserve Bank of the United States (FED) Jerome Powell will appear today at 17:00 (Israel time) before the Banking Committee of the US Congress and testify about the economic situation of the US. The testimony before the committee takes place after the semi-annual report of the Monetary Committee in the US was published last Friday. The report arrives After the basic interest rate in the bank is at a rate of 4.5%-4.75% and the expectation in the markets today is for another increase of 0.25% in the next beat (on March 22).
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Powell will testify before Congress about the bank’s activities in the fight against the ongoing price increase and in light of the expectation that the high interest rate will continue for a long time and even continue to rise.
The report issued by the committee prior to the testimony of the chairman of the bank indicates the development of the factors influencing the bank’s monetary policy and the US economy. Monitoring these factors indicates the direction of the central bank in the next interest rate decisions. The committee indicates in the report the development of these factors : The high inflation levels, which increased by 5.6% in the last year (Core CPE), the particularly tight employment market which contributes to wage pressures and an increase in inflation and consumer spending, which despite interest rate increases is still expanding and also affects the price index.
The report emphasizes that although interest rate increases have slowed down since last December and each rate only increases by a quarter of a percent, there is still a long way to go. In light of the bank’s inflation target of 2%, the bank reports that there is a need for continued interest rate increases, albeit moderately, in order to achieve the target inflation.