The Federal Reserve has not made any decision on the size of a potential interest rate hike later this month, Fed Chairman Jerome Powell said Wednesday.
“We have not made any decision about the March meeting. We’re not going to do that until we see the additional data,” Powell said, in testimony to the House Financial Services panel.
The larger point, Powell said, is that the Fed is not on a “pre-set path.”
“We will be guided by the incoming data and the evolving outlook,” he said.
Powell listed the February jobs report, to be released Friday, as a key piece of data, along with consumer and wholesale inflation data that will be released before the Fed interest-rate committee’s March 21-22 meeting. The Fed chair also pointed to the January job openings and quits data released earlier Wednesday.
The data showed some modest easing in tight labor markets but progress is slow, economists said.
Read: Job openings dropped to 10.8 million in January from 11.2 in the prior month.
On Tuesday, Powell surprised markets when he opened the door to possibly accelerating the pace of interest rate hikes to a 50 basis point increase at the March meeting.
That would reverse the Fed’s strategy to raise its policy interest rate in quarter-percentage point increments. Officials had backed this policy as the best way to probe how high rates need to go without causing too much damage to the economy.
Powell also said the Fed is prepared to raise interest rates higher than previously estimated due to strong economic data and inflation readings.
U.S. stocks
SPX,
+0.20%
DJIA,
-0.20%
were volatile in early trading on Wednesday after falling in the prior session on Powell’s comments about the March meeting. Yields on the 2-year Treasury note
TMUBMUSD02Y,
4.994%
moved down to 4.99% on Wednesday after topping 5% for the first time since 2007 in the prior trading session.
