Federal Reserve's Powell: Faster removal of policy accommodation is appropriate

Apr. 21, 2022 1:28 PM ETBy: Liz Kiesche, SA News Editor35 Comments

Fed Chair Jerome Powell Speaks At The National Association for Business Economics

Samuel Corum/Getty Images News

  • "It is appropriate to move more quickly" than in the last tightening cycle to remove monetary accommodation, Federal Reserve Chair Jerome Powell said during an IMF debate on the global economy.
  • 50 basis-point hikes are "on the table," particularly for the May meeting, he added.
  • "Many on the (FOMC) committee" at the March meeting were considering one or more 50-bps hikes this year, he added. Powell declined to say where he weighed in in that discussion.
  • Update at 1:40 PM ET: "We’re going to be raising rates and expeditiously getting to neutral," Powell said. The Fed will then tighten policy if required to get inflation under control, he added.
  • Note that the CME Fed Watch Tool now has a 50bps hike at a 99.8% for the May meeting. For the June meeting, the probability of a 75bps hike stands at 69.9%.
  • European Central Bank President Christine Lagarde gave no indication of when she expects the ECB will raise rates. "To be fixated on a time or day doesn't make any sense to me," she said. Rather, the ECB seeks to be data dependent in making those decisions.
  • 2:04 PM ET: Asked about whether globalization is reversing, Powell said, "It’s not clear that we’re seeing a reversal of globalization. It may be slowing."
  • He warned that less globalization is likely to increase inflation and to reduce productivity.
  • 2:12 PM ET: Event ends.
  • Previously (April 18), St. Louis Fed President James Bullard, perhaps the Fed's biggest hawk, said the fed funds rate should be pushed up to at least 3.5% by the end of the year.
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