Powell Warns of 'Some Pain' for Households, Businesses

Fed chief Jerome Powell delivered a closely watched speech on Friday that made clear he expects the central bank to continue raising interest rates, reports CNBC. Wall Street didn't seem thrilled: The Dow fell 200 points as Powell spoke in Jackson Hole, Wyoming, and it was down more than 300 points within a half-hour. Powell didn't go into specifics about the Fed's next moves on rates, but he strongly suggested the fight against inflation wasn't over.

• “While higher interest rates, slower growth, and softer labor market conditions will bring down inflation, they will also bring some pain to households and businesses,” Powell said. “These are the unfortunate costs of reducing inflation. But a failure to restore price stability would mean far greater pain.”

• In the assessment of the AP, Powell's speech means the Fed "will likely impose more large interest rate hikes in coming months and is resolutely focused on taming the highest inflation in four decades."
• The Fed has raised its benchmark rate by 0.75 percentage points at each of its last two meetings, an unprecedented pace, and it now stands between 2.25% and 2.5%, notes the Wall Street Journal.
• On the bright side, Powell said the US economy "continues to show strong underlying momentum," and recent data suggests inflation may have peaked, per CNBC. However, Powell said this is "no place to stop or pause" the Fed's aggressive push to try to keep it in check.

(More Federal Reserve stories.)