Fed chair Powell says interest rates still likely to rise

In attempting to explain the unexpectedly sanguine jobs report for January, Federal Reserve chair Jerome Powell last Tuesday repeated his position from the previous week’s policy meeting in which the central bank raised interest rates by a quarter of a percentage point.

Powell essentially reiterated that another couple of interest rate hikes were probably needed to bring inflation down, as the outcome is still seen as uncertain.

A government report on February 3 showed that US job hiring accelerated in January was “certainly strong – stronger than anyone I know expected,” Powell said last Tuesday during a moderated discussion before the Economic Club of Washington.

He also said “the disinflationary process, the process of getting inflation down, has begun and it’s begun in the goods sector, which is about a quarter of our economy. But it has a long way to go. These are the very early stages.”

Meanwhile, retail sales in the eurozone fell in December by the biggest decline since April 2021, as households tightened their belts amid high inflation and rising interest rates.

Retail sales in the countries that share the euro currency declined by 2.7 per cent on the month, following a...