Powell says 'inflation is much too high' and the Fed will take 'necessary steps' to address

cnbc.com:

Federal Reserve Chairman Jerome Powell on Monday vowed tough action on inflation, which he said jeopardizes an otherwise strong economic recovery.

«The labor market is very strong, and inflation is much too high,» the central bank leader said in prepared remarks for the National Association for Business Economics.

The speech comes less than a week after the Fed raised interest rates for the first time in more than three years in an attempt to battle inflation that is running at its highest level in 40 years.

Reiterating a position the Federal Open Market Committee made Wednesday in its post-meeting statement, Powell said interest rate hikes would continue until inflation is under control. He said the increases could be even higher if necessary than the quarter-percentage-point move approved at the meeting.

«We will take the necessary steps to ensure a return to price stability,» he said. «In particular, if we conclude that it is appropriate to move more aggressively by raising the federal funds rate by more than 25 basis points at a meeting or meetings, we will do so. And if we determine that we need to tighten beyond common measures of neutral and into a more restrictive stance, we will do that as well.»

A basis point is equal to 0.01%. FOMC officials indicated that 25 basis point increases are likely at each of their remaining six meetings this year. However, markets are pricing in about a 50-50 chance the next hike, at the May meeting, could be 50 basis points.

Stocks slipped to their lows of the session following Powell's remarks while Treasury yields rose.

The sudden policy tightening comes with inflation as measured by the consumer price index running at 7.9% on a 12-month basis. A measure that the Fed prefers