U.S. Federal Reserve chair Jerome Powell along with top central bankers, said further policy rate hikes are on the horizon due to the sustained strength of the labor market in the country.

Powell made the statement on June 28 during the ECB Forum on Central Banking in Portugal. The panel included the Bank of England Governor Andrew Bailey, the Bank of Japan Governor Kazuo Ueda, and ECB President Christine Lagarde.

The central bankers were vocal about the need for further rate hikes to bring inflation down to the 2% target, despite fears of a significant downturn in the economy caused by said hikes.

Lagarde said:

“I think we have to be as persistent as inflation is persistent… We have to be resolute and decided and determined in reaching the target that we have set and not debate the target as we are running that race.

Powell and Bailey echoed the sentiments, saying that the “robust” jobs market called for further tightening to control the extremely high inflation. On the other hand, Ueda said that the growth in the jobs markets does not necessarily call for further hikes for now.

Aggressive hikes likely for U.S.

Powell said the rate hikes could potentially be aggressive if the data shows there is a need for it as the main priority for central banks, including the Fed, is controlling inflation and bringing it down to 2%.

He added that tightening has yet to hit a peak and there is still room for further hikes to ensure inflation is brought down. The Fed chair said:

“The bottom line is that policy hasn’t been restrictive enough for long enough.”

The Fed raised the interest rate consecutive for three straight quarters from March 2022 and only stopped to assess the impact in June.

Markets had been expecting rate hikes to slow down to alternate meetings based on previous comments made by the Fed at the latest FOMC meeting. However, Powell’s latest take on inflation points to consecutive hikes at the upcoming meetings.

He said:

“I wouldn’t take, you know, moving at consecutive meetings off the table.”

Meanwhile, economists believe these rate hikes will have a delayed impact on the economy and their effects have yet to materialize in the form of a steep recession.

The post Central bankers warn of further rate hikes at ECB Forum appeared first on CryptoSlate.