Fed reiterates it will 'soon' be time to raise interest rates

[ATLANTA] The Federal Reserve reiterated its view that it will "soon" be time to raise interest rates to counter high inflation amid a buoyant US job market.

"With inflation well above the FOMC's longer-run objective and a strong labor market, the Committee expects it will soon be appropriate to raise the target range for the federal funds rate," the US central bank said in its semi-annual report to Congress, referring to the policy-setting Federal Open Market Committee. The report was released Friday (Feb 25) ahead of testimony to lawmakers next week by Chair Jerome Powell.

Powell told reporters after officials met in January that they were leaning toward raising rates at their Mar 15-16 meeting to confront the hottest inflation in 40 years.

"Recent geopolitical tensions related to the Russia-Ukraine situation are a source of uncertainty in global financial and commodity markets," according to the report, which reflected information gathered through 12pm Washington time on Feb 23, before Russia's invasion of Ukraine.

Officials speaking since the conflict escalated have stuck to their resolve for liftoff next month with at least one - Governor Christopher Waller - arguing there was a strong case for a half-point move if the economic numbers keep coming in hot.

Data earlier on Friday showed the Fed's preferred gauge of price pressures rising 6.1 per cent in the 12 months through January - 3 times their 2 per cent target and the most since 1982. Officials get another important piece of evidence next Friday with February's employment report.

BLOOMBERG