CFOs Warily Watch—and Wait—for an Acceleration in Fed Interest-Rate Hikes

For some finance chiefs of companies such as auto retailer Sonic Automotive Inc., the possibility that the Fed will raise interest rates by a larger half-percentage-point later this month comes as little surprise given that consumer spending remains strong and hiring continues to be robust. Photo: Kris Tripplaar/Sipa USA/Associated Press

By Jennifer Williams-Alvarez

March 9, 2023 5:30 am ET

The Federal Reserve stands ready to accelerate interest-rate hikes to combat inflation, central bank Chair Jerome Powell said in congressional testimony the past two days. Some finance chiefs who are already pushing their companies to do more with less amid rising costs said they are closely monitoring the impact of what comes next.

Mr. Powell’s comments, delivered during semiannual hearings before Senate and House panels, open up the possibility that a larger half-point interest rate increase may be in store when Fed officials meet for their two-day policy meeting March 21-22. “The latest economic data have come in stronger than expected, which suggests that the ultimate level of interest rates is likely to be higher than previously anticipated,” he told the Senate Banking Committee on Tuesday.