At an International Monetary Fund research conference held Nov. 9 in Washington, D.C., Federal Reserve Chair Jerome Powell warned that while progress was being made to curb inflation, there was a possibility that more rate hikes could be in the offing—which, of course, would bring mortgage rates higher as well.
“U.S. inflation has come down over the past year, but remains well above our 2% target,” he said. “My colleagues and I are of course gratified by this progress, but we expect that the process of getting inflation sustainable down to 2% has a long way to go.
“We know that ongoing progress toward our 2% goal is not assured. Inflation has given us a few head fakes along the way. If it becomes appropriate to tighten policy further, we will not hesitate to do so. We will continue to move carefully, however, allowing us to address both the risk of being misled by a few good months of data and the risk of overtightening.
“We’re making decisions meeting by meeting based on the totality of the incoming data and their implications for the outlook for economic activity, inflation as well as the balance of risks, as we determine the extent of additional policy firming that may be appropriate to return inflation to 2% over time. And we will keep at it until the job is done.”
The 12-month change in the total personal consumption expenditures (PCE) price index has declined from 6.6% in September 2022 to 3.4% in September 2023.
To watch the conference, go here.
