Fed's Powell will hike rates 'until the job is done'

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Wall Street Journal predicts another massive rate hike could come soon

Kace Capital managing partner and FOX Business market analyst Kenny Polcari and Bryce Doty, senior vice president of Sit Investment, discuss the possibility of another rate hike and the new U.K. prime minister’s proposal to cap energy bills.

Federal Reserve Chairman Jerome Powell is making sure there are no gray areas when it comes to the central bank’s commitment to bringing down inflation. 

"History cautions strongly against prematurely loosening policy," Powell said Thursday during a Q&A session at the Cato Institute. "I can assure you that my colleagues and I are strongly committed to this project, and we will keep at it until the job is done." 

The Fed has been ratcheting up interest rates at the fastest pace in decades as it seeks to cool the hottest inflation in four decades. Policymakers approved back-to-back 75-basis-point interest rate hikes in June and July and have signaled that another increase of that magnitude is on the table during their September meeting. There is now an 84% probability of that size hike on the 21st, according to the CME’s Fed Watch Tool. Another could follow at the Nov. 2, meeting. 

FED RAISES INTEREST RATES BY 75 BASIS POINTS IN ANOTHER HISTORIC MOVE TO TACKLE INFLATION

Powell also cautioned that along with rate hikes, data points will hold key clues. 

"Inflation expectations are really important and need to be carefully monitored because if they do move up, they can make the job of getting back to price stability so much harder," he warned.

“Inflation expectations are really important and need to be carefully monitored because if they do move up, they can make the job of getting back to price stability so much harder.”

U.S. stocks remained volatile before and after Powell's remarks. 

INFLATION CLIMBS 8.5% IN AUGUST

S&P 500

Powell has faced wide criticism for underestimating rising inflation in the latter part of 2021, famously deeming it "transitory" before admitting policymakers missed the boat. Since the Fed has been playing catch-up with rate hikes, but for some, the pace and plan haven’t been enough. 

FMR. WHITE HOUSE ECONOMIC ADVISOR TALKS FISCAL SPENDING PROBLEM

Former Treasury Secretary Larry Summers, a frequent critic of Powell’s, appeared to signal on Thursday that the chairman is now on the right path.

"I am glad Chairman Powell and his colleagues are now being clear that they will do what is necessary to contain inflation," Summers said in a tweet. "The more determined they appear, the lower will be the cost of reducing inflation."

FOX Business' Megan Henney contributed to this report. 

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