Federal Reserve Chair Jerome Powell said it made sense to continue slowing the pace of interest rate increases as officials try to find the level that will restrain economic activity and inflation without causing unnecessary weakness.
The Fed raised interest rates most recently in May to a range between 5% and 5.25%, a 16-year high. Powell has signaled that officials are prepared to raise rates at the Fed’s July 25-26 meeting after holding them steady at their meeting earlier this month.
“Our commitment isn’t to a particular number of rate hikes; it is to a stance of policy that’s sufficiently restrictive to bring inflation down to 2%,” Powell said during a moderated discussion in Madrid on Thursday.
Officials raised interest rates aggressively last year, including four consecutive increases of 0.75 percentage point between June and November. They slowed the pace of increases in December when they lifted rates by a half point, and then they raised rates by a quarter point at their first three meetings this year.