• Federal Reserve Chair Jerome Powell stuck to his message that interest rates need to keep rising to quash inflation and this time, the bond market listened.
• In particular, Powell floated the idea during an event in Washington on Tuesday that borrowing costs may reach a higher peak than traders and policymakers anticipate.
• “We think we are going to need to do further rate increases,” Powell told David Rubenstein during a question-and-answer session at the Economic Club of Washington. “The labor market is extraordinarily strong.”
• If the job situation remains very hot, “it may well be the case that we have to do more,” he said.
• Powell said the report “shows you why we think this will be a process that takes a significant period of time.”