Economy's solid growth could require more Fed hikes to fight inflation, Powell says at Jackson Hole

abcnews.go.com:

The continued strength of the U.S. economy could require further interest rate increases, Federal Reserve Chair Jerome Powell said in a closely watched speech that also highlighted the uncertain nature of the economic outlook

JACKSON HOLE, Wyoming — The continued strength of the U.S. economy could require further interest rate increases, Federal Reserve Chair Jerome Powell said Friday in a closely watched speech that also highlighted the uncertain nature of the economic outlook.

Powell noted that the economy has been growing faster than expected and that consumers have kept spending briskly — trends that could keep inflation pressures high. He reiterated the Fed's determination to keep its benchmark rate elevated until inflation is reduced to its 2% target.

“We are attentive to signs that the economy may not be cooling as expected," Powell said. “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.”

«Although inflation has moved down from its peak — a welcome development — it remains too high.”

Powell's speech, at an annual conference of central bankers in Jackson Hole, Wyoming, highlighted the uncertainties surrounding the economy and the complexity of the Fed's response to it. It marked a contrast to his remarks here a year ago, when he bluntly warned that the Fed would continue its campaign of sharp rate hikes to rein in spiking prices.

“When it comes to another rate hike, the chair still very much has his finger on the trigger, even if it’s a bit less itchy than it was last year,” said Omair Sharif, chief economist at Inflation Insights.

Substantially higher loan rates, a