New Fed chairman isn’t afraid to raise rates amid market turmoil

Jerome Powell, the new chairman of the Federal Reserve, made the case on Tuesday for raising borrowing costs even amid stock market turmoil, according to prepared remarks.

Powell, who was set to make his debut before Congress on Tuesday, takes the reins at the US central bank from predecessor Janet Yellen amid an improving economy and a stock market that’s been whipsawed by violent selloffs.

In his prepared remarks, however, he noted that he expects wages to rise and inflation to be higher this year than in 2017 — two conditions that would push the Fed to make borrowing money more expensive — in order to keep the economy from overheating.

“While many factors shape the economic outlook, some of the headwinds the US economy faced in previous years have turned into tailwinds: In particular, fiscal policy has become more stimulative and foreign demand for US exports is on a firmer trajectory,” he said in prepared remarks.

In his coming out, he seemed to signal that turmoil in the stock market won’t have any effect on the trajectory of the Fed’s hiking interest rates.

“Despite the recent volatility, financial conditions remain accommodative,” he said.

Powell will take questions from Congress later today.