Powell Suggests Sharp Rate Hikes Coming as Fed Fights Inflation

Federal Reserve Chair Jerome Powell signaled that sharp interest rate increases are likely in May as the Fed grapples with high inflation. In a panel discussion at the International Monetary Fund's spring meetings, Powell said the central bank must act faster to rein in inflation, which has reached a four-decade high.

Powell suggested that 'front-loading' aggressive rate hikes could be on the table for the Fed's next policy meeting on May 3-4. He mentioned a half-point increase as a possibility, but did not confirm it.

European Central Bank President Christine Lagarde also spoke at the event, noting that economic growth has been faster in Europe and the US compared to other regions. She said their inflation is driven by different components.