The FOMC increased interest rates by 0.75 percentage point while indicating ‘unusually large’ hikes may be appropriate in future meetings; Bitcoin’s price jumps.
Powell began by noting that indicators for spending and production have both slowed, but attested that labor market conditions were still strong.
Additionally, Powell discussed a myriad of subjects including continued supply chain constraints, fears of recession, continued quantitative tightening, the Ukrainian war, and gave insight to future possible FOMC action as it relates to the rising pressures of inflation.
“Another unusually large increase could be appropriate at our next meeting,” Powell warned.
Powell made it clear that further increases are likely to come, and the FOMC believes the economy needs to slow down for the U.S. to reclaim any hope of price stability.
“This process is likely to involve a period of below trend economic growth and a softening of labor market conditions,” he explained. “We think it’s necessary to have growth slow down.”