English
The Fed Chairman confirms that he will continue to raise interest rates to fight inflation and refuses to repeat the mistake of the seventies
Federal Reserve Chairman Jerome Powell made a firm commitment on Friday to halt inflation, warning that he expects the Fed to continue raising interest rates in a way that will cause "some pain" to the US economy.
In his much-anticipated annual address in Jackson Hole, Wyoming, Powell emphasized that the Fed would "use our tools aggressively" to attack inflation still near its highest levels in more than 40 years.
Even with a series of four consecutive interest rate increases totaling 2.25 percentage points, Powell said that "there is no room for pause or pause" even though benchmark rates may be around an area that is neither stimulating nor restricting growth.
In prepared remarks, he said, “While high interest rates, slow growth, and weak labor market conditions will lower inflation, they will cause some pain for households and businesses. These are the unfortunate costs of lowering inflation, but failure to restore price stability will mean greater pain.” much."
These comments come amid signs that inflation may have peaked but not showing any noticeable signs of declining.
Two closely watched metrics, the Consumer Price Index and the PCE Price Index, showed that prices did not change much in July, largely due to a sharp drop in energy costs.
Meanwhile, other areas of the economy are slowing, housing in particular is declining rapidly, and economists predict that the massive increase in employment over the past year and a half is likely to subside.
However, Powell cautioned that the Fed's focus is wider than a month or two of data, and will continue to press ahead until inflation drops close to its long-term target of 2%.
While Fed leaders, including Powell, have often used the Jackson Hole symposium as an opportunity to outline general shifts in fiscal policy, Powell's Friday remarks were recorded in just 6 pages.
