He noted, as he has, that banking stresses that emerged in March "may well lead" to more tightening in credit conditions than would be expected from rate hikes alone.
After 10 straight rate hikes since March 2022, the Fed's policy-setting Federal Open Market Committee earlier this month opted to leave its policy rate unchanged at the 5%-5.25% range.
"We made this decision in light of the distance we have come in tightening policy, the uncertain lags in monetary policy, and the potential headwinds from credit tightening," Powell said.
Rate hikes to date have slowed business investment and the housing sector, where activity is far below its peak last year even as some indicators have recently turned up, Powell said.
"It will take time" for the rest of the economy to feel the full impact of rate hikes to date, he said.
Persons:
Dado Ruvic, Jerome Powell, Powell, Ann Saphir, Leslie Adler
Organizations:
REUTERS, Banco, Espana, Thomson
Locations:
Madrid