Powell Shocks Markets – More Sanctions Await Including Rate Hikes!

<p>&nbsp;Federal Reserve Chairman Jerome Powell in his latest speech focused on the issue of inflation. Powell said at the forum that he expects some interest rate hikes ahead and possibly at aggressive rates.</p><p><br /></p><p>"We believe there will be more restrictions in the future," Powell said during a monetary policy session in Sintra, Portugal. "What's really driving that possibility is a very strong labor market."</p><p><br /></p><p>The comments echoed the stance taken by Powell's fellow policymakers at their June meeting, where the Fed indicated the possibility of another half percentage point increase through the end of 2023.</p><p><br /></p><p><br /></p><p>Assuming a quarter point per meeting, this means two more increases. Earlier comments from Powell indicated a possible hike at a follow-up meeting.</p><p><br /></p><p>Markets responded modestly to Powell's string of speeches with the Dow Jones Industrial Average down more than 120 points.</p><p><br /></p><p>Most economists think rate hikes will eventually pull the U.S. into at least a shallow recession.</p><p><br /></p><p>"There is a strong possibility that there will be a downturn," Powell said, adding that it was not "the most likely case, but the possibility is there."</p>