Putin's War Has Made Jay Powell's Job Easier
A quarter-point hike in March was always the most likely move. Now the Fed chief will look stalwart if he takes even that minimal step to fight inflation.
Less explaining to do.
Photographer: Brendan Smialowski/AFPSome of the world’s most important central banks are showing little sign of walking away from the gradual removal of stimulus after Vladimir Putin’s attack on Ukraine. Higher interest rates are coming — maybe not as quickly or dramatically as speculated weeks ago, but they’re coming nonetheless. Even the bare minimum increase will start to look bold.
Federal Reserve Chair Jerome Powell is likely to signal in testimony to Congress on Wednesday that inflation remains a big worry, though not enough to warrant a dramatic rate liftoff. Bloomberg Economics expects him to flag an initial quarter-point nudge. Two Bank of England officials conveyed Tuesday their support for tightening in some way later this month. An ECB policy maker voiced some caution about rushing to the exit, but still endorsed an ultimate move away from ultra-easy money. The Reserve Bank of Australia, expected to lift rates around mid-year, said little to change minds in its monthly decision Tuesday. In short, they're all more or less staying the course.