MNI BRIEF: Fed’s Powell-Hard To Hike Without Hit To Growth

The Federal Reserve can raise interest rates to fight 40-year high inflation without substantially boosting unemployment or compromising economic growth but the path is narrow and has gotten narrower in recent months, Fed Chair Powell told a panel sponsored by the ECB in Sintra.

“There’s no guarantee that we can do that,” Powell said. “It’s something that’s going to be quite challenging.” The Fed raised rates by 75 basis points this month and has signaled substantial further increases to come.

Former NY Fed executive Rick Roberts and ex-Fed board economist Roberto Perli have told MNI’s FedSpeak podcast they see a recession next year as quite likely.