Fed chair says another 'unusually large' rate hike possible at next meeting

By Ovunc Kutlu

ANKARA (AA) - US Federal Reserve Chair Jerome Powell said Wednesday another "unusually large" interest rate increase is possible at the central bank's next meeting in September.

"While another unusually large increase could be appropriate at our next meeting, that is a decision on the data we get between now and then," Powell said at a news conference after the Federal Open Market Committee (FOMC) raised the target range for the federal funds rate to the 2.25%-2.5% range with a 75 basis points of rate hike.

The decision came after the Fed also increased its benchmark interest rate by another 75 basis points on June 15 -- the largest hike in 28 years.

Powell called the 75 basis points of rate hike as the "right magnitude" based on macroeconomic data, but said the FOMC would not hesitate to make a larger rate hike move.

The chair, however, indicated that the rate hikes could slow at one point.

"It will likely be appropriate to slow the pace of increases, while we assess how our cumulative policy adjustments are affecting the economy and inflation," he said.

Powell noted that the PCE (personal consumption expenditures) price index, the Fed's preferred inflation indicator, annually rose 6.3% in May, saying "supply constraints have been larger and longer than anticipated and price pressures are evident across a broad range of goods services."

"My colleagues and I are strongly committed to bring inflation back down and we are moving expeditiously to do so," he said.

The chair also said the continued strength of the labor market suggests that underlying aggregate demand in American economy still remains "solid."