Fed anticipates "ongoing increases" in interest rates will be appropriate

Federal Reserve Chairman Jerome Powell (pictured) announced yesterday in a media conference that although there has been "modest growth" in spending and production, and job gains have been "robust" and unemployment low, "inflation remains elevated, reflecting supply and demand imbalances related to the pandemic, higher food and energy prices, and broader price pressures."

Aiming to achieve maximum employment while the limiting long-term inflation rate to 2%, the Fed Open Market Committee voted unanimously in favor of raising the target range for the federal funds rate to 3% to 3.25% and said it's anticipated that "ongoing increases in the target range will be appropriate."

Also Mr. Powell predicted that the US housing market is due for a "correction" after major price increases have made home ownership difficult for many Americans. To date, although the Fed's interest rate hikes have slowed housing sales and dropped prices slightly, house prices are expected tio remain high for some time.

The Dow, Nasdaq and S&P 500 indices all finished yesterday down after Mr. Powell reiterated his August message that the Fed intends to reduce inflation and will keep raising rates "until the job is done."