US interest rates will likely peak at a higher level than was previously anticipated due to January data that came in stronger than recent trends expected, Federal Reserve Chair Jerome Powell said Tuesday.
“If the totality of the data were to indicate that faster tightening is warranted, we would be prepared to increase the pace of rate hikes,” he said in prepared remarks released ahead of his appearance at a US Senate hearing.
The strong employment, consumer spending, manufacturing production and inflation figures in January indicated a partial reversal of earlier softening trends, which was likely due to “unseasonably warm weather in January,” Powell said.
The United States has raised its interest rate by 4.5 percentage points over the last year, as the Fed has contended with inflation that remains stubbornly above its long-term target of 2.0 percent.
“We will stay the course until the job is done,” Powell said in the statement.