London Daily

Focus on the big picture.
Wednesday, Sep 17, 2025

Jerome Powell: US central bank boss says he plans to raise rates

Jerome Powell: US central bank boss says he plans to raise rates

The US central bank's boss has indicated that he plans to press ahead with interest rate increases this month.

Speaking in front of Congress, Jerome Powell said he's in favour of a 0.25 point increase, aimed at tackling the surging cost of living.

The bank is under pressure to rein in inflation as prices in the US rise at the fastest rate in 40 years.

Analysts expect a rate hike in March, which would be the first since 2018.

It comes as costs for food, fuel and cars have risen sharply in recent months, leaving families' budgets strained.

Mr Powell admitted that he was open to further interest rate increases further down the line if inflation, which measures how quickly the cost of living rises over time, remains "persistently high."

The idea of raising interest rates is to keep those current and predicted price rises under control.

Higher interest rates make borrowing more expensive, for example. For households, that could mean higher mortgage costs, although - for the vast majority of homeowners - the impact is not immediate, and some will escape it entirely.

Many central banks, including the Federal Reserve in the US, aim to keep inflation contained at 2%.

Mr Powell acknowledged that price increases have jumped far above that target. In January, the increase in the cost of living jumped by 7.5% when compared with a year earlier.

"The inflation that we're experiencing is just nothing like anything we've experienced in decades," he said.

At the start of the pandemic, the Federal Reserve slashed rates to zero in a bid to stimulate spending and the economy at a time when many sectors were shut-down.

But a mix of issues, such as high demand as restrictions ease, labour shortages and supply chain problems have led to increases in the cost of goods in particular.


The chairman of America's central bank Jerome Powell has made it a point during his tenure of trying to demystify what the Federal Reserve does. He is committed to explaining what policymakers are doing and why because of what happened during the 2008 financial crisis.

Even by those standards, he was unusually blunt during his semi-annual Congressional testimony.

Mr Powell telegraphing explicitly what he wants to do at the central bank's next meeting in two weeks: proposing a quarter percentage point rate increase, while moving carefully and watching the economic implications of war in Ukraine.

Even before Russia's invasion, the Fed had a tough job on its hands trying to tame soaring inflation. A series of rate hikes were already expected this year.

But the conflict in Ukraine has complicated that job. The invasion is likely to undermine global growth while pushing up prices, especially for energy and food.

Given the uncertainty, Mr Powell is taking the view that a cautious approach is best and is putting all his cards on the table.

'Significant hardship'


The chair recognised that "high inflation imposes significant hardship" on people and said the Bank will use all its tools to ensure the increased prices do not become "entrenched".

The Fed is not alone in its plans to raise interest rates from their current levels. The Bank of England raised interest rates twice in three months and drew outrage when its boss asked workers not to ask for a pay rise to try to stop prices rising out of control.

Looking ahead, Jerome Powell said that the Fed expects inflation "to decline over the course of the year as supply constraints ease... we are attentive to the risks of potential further upward pressure" on prices.

He cautioned, however, that the invasion of Ukraine, and sanctions imposed by Western countries, create a great deal of uncertainty around the prices of wheat, oil, and other goods.

"The near-term effects on the US economy of the invasion of Ukraine, the ongoing war, the sanctions, and of events to come, remain highly uncertain," he said in his semi-annual testimony to Congress.

"We will be monitoring the situation closely."

On Wednesday, oil prices surged again despite the US and other members of the International Energy Agency agreeing to release 60 million barrels of emergency stockpiles.

Russia is one of the world's largest oil and gas exporters, but US President Biden has not ruled out banning imports from the country.

Comments

Virgil 4 year ago
Oh ya has it straight up. The proverbial crap is about the hit the fan. Fed can't afford to raise rates and it can't afford not to. In business terminology, the USA is insolvent.
Oh ya 4 year ago
BS. unless he raises the rate over the 7.5% it will do nothing to stop inflation. Raising it 1/4 % is like peeing in the ocean, it is a joke the US government has to borrow money now to pay interest on its national debt so they can not afford a rate hike. Average Joe household is in debt more now than ever before and can not afford a rate hike. And everyone with 2 working brain cells knows you can not raise rates as your country is headed into a recession like the US is. So he might raise it .25% and then retract it and start QE again.

Newsletter

Related Articles

0:00
0:00
Close
Hong Kong Industry Group Calls for HK$20 Billion Support Fund to Ease Property Market Stress
Joe Biden’s Post-Presidency Speaking Fees Face Weak Demand amid Corporate Reluctance
Charlie Kirk's murder will break the left's hateful cancel tactics
Kash Patel erupts at ‘buffoon’ Sen. Adam Schiff over Russiagate: ‘You are the biggest fraud’
Homeland Security says Emmy speech ‘fanning the flames of hatred’ after Einbinder’s ‘F— ICE’ remark
Charlie Kirk’s Alleged Assassin Tyler Robinson Faces Death Penalty as Charges Formally Announced
Actor, director, environmentalist Robert Redford dies at 89
The conservative right spreads westward: a huge achievement for 'Alternative for Germany' in local elections
JD Vance Says There Is “No Unity” with Those Who Celebrate Charlie Kirk’s Killing, and he is right!
Trump sues the 'New York Times' for an astronomical sum of 15 billion dollars
Florida Hospital Welcomes Its Largest-Ever Baby: Annan, Nearly Fourteen Pounds at Birth
U.S. and Britain Poised to Finalize Over $10 Billion in High-Tech, Nuclear and Defense Deals During Trump State Visit
China Finds Nvidia Violated Antitrust Laws in Mellanox Deal, Deepens Trade Tensions with US
US Air Force Begins Modifications on Qatar-Donated Jet Amid Plans to Use It as Air Force One
Pope Leo Warns of Societal Crisis Over Mega-CEO Pay, Citing Tesla’s Proposed Trillion-Dollar Package
Poland Green-Lights NATO Deployment in Response to Major Russian Drone Incursion
Elon Musk Retakes Lead as World’s Richest After Brief Ellison Surge
U.S. and China Agree on Framework to Shift TikTok to American Ownership
London Daily Podcast: London Massive Pro Democracy Rally, Musk Support, UK Economic Data and Premier League Results Mark Eventful Weekend
This Week in AI: Meta’s Superintelligence Push, xAI’s Ten Billion-Dollar Raise, Genesis AI’s Robotics Ambitions, Microsoft Restructuring, Amazon’s Million-Robot Milestone, and Google’s AlphaGenome Update
Le Pen Tightens the Pressure on Macron as France Edges Toward Political Breakdown
Musk calls for new UK government at huge pro-democracy rally in London, but Britons have been brainwashed to obey instead of fighting for their human rights
Elon Musk responds to post calling for the murder of Erika Kirk, widow of Charlie Kirk: 'Either we fight back or they will kill us'
Czech Republic signs €1.34 billion contract for Leopard 2A8 main battle tanks with delivery from 2028
USA: Office Depot Employees Refused to Print Poster in Memory of Charlie Kirk – and Were Fired
Proposed U.S. Bill Would Allow Civil Suits Against Judges Who Release Repeat Violent Offenders
Penske Media Sues Google Over “AI Overviews,” Claiming It Uses Journalism Without Consent and Destroys Traffic
Indian Student Engineers Propose “Project REBIRTH” to Protect Aircraft from Crashes Using AI, Airbags and Smart Materials
French Debt Downgrade Piles Pressure on Macron’s New Prime Minister
US and UK Near Tech, Nuclear and Whisky Deals Ahead of Trump Trip
One in Three Europeans Now Uses TikTok, According to the Chinese Tech Giant
Could AI Nursing Robots Help Healthcare Staffing Shortages?
NATO Deploys ‘Eastern Sentry’ After Russian Drones Violate Polish Airspace
Anesthesiologist Left Operation Mid-Surgery to Have Sex with Nurse
Tens of Thousands of Young Chinese Get Up Every Morning and Go to Work Where They Do Nothing
The New Life of Novak Djokovic
The German Owner of Politico Mathias Döpfner Eyes Further U.S. Media Expansion After Axel Springer Restructuring
Suspect Arrested: Utah Man in Custody for Charlie Kirk’s Fatal Shooting
In a politically motivated trial: Bolsonaro Sentenced to 27 Years for Plotting Coup After 2022 Defeat
German police raid AfD lawmaker’s offices in inquiry over Chinese payments
Turkish authorities seize leading broadcaster amid fraud and tax investigation
Volkswagen launches aggressive strategy to fend off Chinese challenge in Europe’s EV market
ChatGPT CEO signals policy to alert authorities over suicidal youth after teen’s death
The British legal mafia hit back: Banksy mural of judge beating protester is scrubbed from London court
Surpassing Musk: Larry Ellison becomes the richest man in the world
Embarrassment for Starmer: He fired the ambassador photographed on Epstein’s 'pedophile island'
Manhunt after 'skilled sniper' shot Charlie Kirk. Footage: Suspect running on rooftop during panic
Effective Protest Results: Nepal’s Prime Minister Resigns as Youth-Led Unrest Shakes the Nation
Qatari prime minister says Netanyahu ‘killed any hope’ for Israeli hostages
King Charles and Prince Harry Share First In-Person Moment in 19 Months
×