Comment on Fed chair signals gradual rate increases in tame inflation era

Fed chair signals gradual rate increases in tame inflation era

WASHINGTON — The U.S. Federal Reserve will likely keep raising short-term interest rates at only a gradual pace, Fed chair Jerome Powell said Wednesday, partly because there are few signs, so far, that the ultra-low U.S. unemployment rate is pushing up inflation. In a speech in Portugal, Powell said that with the unemployment rate at an 18-year low of 3.8 percent and inflation near the Fed’s 2 percent target, the case for continued gradual increases in rates “is strong.” Still, Powell suggested that the Fed is unlikely to accelerate its increases out of concern that the low unemployment rate will lead to accelerated inflation.

 

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