The Federal Reserve released the prepared remarks of its chairman Jerome Powell's testimony before the Senate Banking Committee, which sounded more hawkish than markets had expected.
Powell stated that despite the forceful actions to tighten policy stance taken over the past year, the Fed has more work to do.
The official noted that the latest economic data have come in stronger than expected, suggesting that the ultimate level of interest rates is likely to be higher than previously anticipated. "If the totality of the data were to indicate that faster tightening is warranted, we would be prepared to increase the pace of rate hikes," he added.
The Fed's chief also repeated that the policymakers continue to anticipate that ongoing increases in the target range for the federal funds rate will be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive to return inflation to 2% over time. He added that the Fed will continue to make its decisions meeting by meeting, taking into account the totality of incoming data and their implications for the outlook for economic activity and inflation.