Jay Powell said that he believed that the Federal Reserve can move forward with “normalising interest rates” as it continues to wind down measures taken to mitigate the effects of the financial crisis, and that he believes that a case is “coming together” to raise rates at the central bank’s meeting later this month.
“We’ve been patient in removing that accommodation”, Mr Powell said during a hearing on Tuesday before the Senate banking committee on his nomination to serve as Fed chair. “I think the patience has served us well. It’s time for us to be normalising interest rates.”
Wall Street has been watching closely to see what signals Mr Powell gives about the direction he would like interest rates to take if he is confirmed to the top spot on the Fed. While investors expect the central bank to increase rates at its December meeting, there is uncertainty about whether it will continue to tighten policy or hold fire in light of sluggish inflation and wage growth.
While Mr Powell, who is a Fed governor, declined to give a specific answer on whether the central bank would raise rates later this month, he said that he thinks “the case for raising interest rates at our next meeting is coming together.”
He added later in the hearing that he expects the “gradual path” the Fed has taken to raise interest rates thus far will continue.