Fed Chief: 'I Wouldn't Rule out Raising Rates in Future Meetings'

Federal Reserve Chairman Jerome Powell said on Wednesday that more interest rate hikes are likely at future meetings of the bank, adding that he did not rule out raising the cost of borrowing at a policy-setting meeting scheduled for the end of July.

"We have come a long way" with regard to raising interest rates, Powell said in a conference of the European Central Bank (ECB), pointing out that the suspension this month came in order to absorb the impact of the cycle of raising interest rates on the economy.

He continued, saying that future monetary policy measures will be driven by the performance of the economy, noting that "the only thing we decided is not to raise interest rates at the June meeting."

"I wouldn't rule out taking such action in back-to-back meetings at all," he added. "It is clear that the committee believes there is more work to be done, and that more rate hikes would probably be right" sometime during the year.

The next meeting of the Fed's Open Market Committee to set interest rates is July 25-26.

Powell said that the rapid pace of rate hikes was appropriate when inflation was so high and the stance of monetary policy was inconsistent with it, but that policy is now closer than it should be.

He also mentioned that the US economy has remained strong so far in the face of the Federal Reserve's actions, and the labor market has performed surprisingly well.

"It's a positive thing that we were able to raise interest rates by 500 basis points with the expectation going forward, and we still have a very strong job market," he added.

The US central bank chief did not rule out the possibility that the bank's measures, aimed at bringing the inflation rate back to 2 percent, could lead to some economic trouble.

"The least likely case is that we find our way to a better balance without a really sharp downturn," Powell said. He added that there is also "a high possibility of an economic downturn, but it is not the most likely case."

He pointed out that efforts to bring inflation back to the target level will take a long time, and "I don't expect us to go back to 2% (rate) this year or next," but that it is likely to happen in 2025.