A rate increase before March would also involve bringing forward the conclusion of the Fed’s asset-purchase program – enhancing the potential shock to an unprepared public. The Fed instead favors taking in further data before it makes a decision next month.
Federal Reserve officials are in no rush to raise interest rates prior to their scheduled policy meeting next month, nor is a half percentage-point move in March yet likely, despite a bigger-than-expected jump in consumer prices that stoked speculation about such options.
An emergency increase risks signalling panic and cementing criticism that the central bank is too far behind in reining in inflation, while Chair Jerome Powell only last month predicted the pace of price increases would cool later this year. Powell also has shown a preference for building consensus within the policy-setting committee, and no Fed officials are now signalling a rush to act before its March 15-16 gathering.
