Fed chair supports 0.25% interest rate increase in next meeting

By Ovunc Kutlu

ANKARA (AA) - US Federal Reserve Chair Jerome Powell said Wednesday he will propose a 25 basis points rate hike at the central bank's next meeting.

"With inflation well above 2% and a strong labor market, we expect it will be appropriate to raise the target range for the federal funds rate at our meeting later this month," Powell told the House of Representatives Committee on Financial Services.

The Fed head said he is "inclined to propose and support a 25 basis point rate hike" after the Federal Open Market Committee's two-day meeting on March 16.

Many analysts have been divided whether the central bank would make a 25 basis or 50 basis points rate hike.

After Powell's comments, the probability of a 25 basis points hike soared to 97.8% at 3.07 p.m. EDT, according to the FedWatch Tool provided by US-based global markets company Chicago Mercantile Exchange (CME) Group.

Amid the potential negative effect of Russian sanctions on the US economy, the probability of the Fed keeping interest rates unchanged after the meeting stood at 2.2%, according to CME Group.