Fed 'prepared' for more rate hikes if needed

JEROME POWELL AT JACKSON HOLE SYMPOSIUM

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Federal Reserve Chair Jerome Powell said the US central bank is prepared to raise interest rates further if needed and intends to keep borrowing costs high until inflation is on a convincing path toward the Fed's 2 per cent target.

"Although inflation has moved down from its peak - a welcome development - it remains too high," Powell said in the text of a speech Friday at the US central bank's annual conference in Jackson Hole, Wyoming. "We are prepared to raise rates further if appropriate, and intend to hold policy at a restrictive level until we are confident that inflation is moving sustainably down toward our objective."

The Fed chief welcomed the slower price gains the US economy has achieved thanks to tighter monetary policy and further loosening of supply constraints after the pandemic. However, he cautioned that the process "still has a long way to go, even with the more favourable recent readings."