Fed's Powell Says 50 Basis Point Hike ‘On the Table’

Federal Reserve Chair Jerome Powell said Thursday that raising the benchmark U.S. interest rate by 50 basis points (0.5 percentage point) “will be on the table” for the next Federal Open Market Committee (FOMC) meeting in May.

That's significant because it shows how aggressively officials plan to tamp down inflation that has climbed to a rate of 8.5%, the fastest rate in four decades. In recent years, the Fed has rarely hiked interest rates by more than 25 basis points at a time.

“I would say 50 basis points will be on the table for the May meeting,” the Powell said on a panel presented by the International Monetary Fund (IMF) alongside European Central Bank President Christine Lagarde and other representatives from the IMF, Indonesia and Barbados.

In its March meeting, members of the FOMC agreed on a hike of 25 basis points, but Powell said that it would be appropriate to “move a little more quickly.”

• It's “absolutely essential to restore price stability,” Powell said.
• “It may be that the actual [inflation] peak was in March, but we don’t know that, so we’re not going to count on it,” he added.
• “We’re really going to be raising rates and getting expeditiously to levels that are more neutral and then that are actually tight ... if that turns out to be appropriate once we get there,” Powell said.

Given that the crypto market has been increasingly moving in correlation with the equity market, with the 90-day correlation between bitcoin BTC$87,948.56 and the S&P 500 hitting a 17-month high in March, crypto traders are watching macroeconomic indicators.

This is the last time that Powell is scheduled to deliver public remarks before Federal Reserve officials go into the FOMC blackout period before their two-day meeting on May 4. During these blackout periods, the officials are supposed to refrain from making comments on the economy or interest rates.