Federal Reserve Chair Jerome Powell tried to assuage fears of rising US inflation, even while a majority of central bank officials now believe interest rates will increase in 2023.
While widespread vaccinations have allowed the US to rebound faster than previously expected from the Covid-19 pandemic downturn, the Fed’s policy-setting Federal Open Market Committee cautioned that “risks to the economic outlook remain” in a statement following its two-day meeting.
But amid the accelerating rebound, Fed officials appear to have grown more hawkish, with 11 of the 18 committee members now expecting at least two hikes of the benchmark lending rate in 2023, according to updated quarterly economic projections.
The March forecasts showed only seven officials expecting rate liftoff in 2023, but seven now expect one as soon as next year.
However, Powell stressed those projections “do not represent a committee decision or plan.”