Jakarta, CNBC Indonesia – The ‘ghost’ of inflation continues to haunt the United States (US). This condition was also responded by Federal Reserve Governor Jerome Powell who promised to take strict action because it jeopardizes the ongoing economic recovery.
“The labor market is very strong, and inflation is too high,” the head of the central bank was quoted as saying CNBC InternationalTuesday (22/3/2022).
The remarks came after less than a week the Fed raised interest rates for the first time in more than three years in a bid to combat inflation, which is running at its highest level in 40 years.
Powell also emphasized that interest rate hikes will continue until inflation is under control. The increase could be higher than the previously agreed 25 basis points. Other strict policies will continue to be considered.
“We will take the necessary steps to ensure the return of price stability.
Federal Open Market Committee (FOMC) officials indicated a 25 basis point gain was likely in their remaining six meetings this year.
However, the market also sees an opportunity for an increase to 50 basis points at the May meeting.
Previously, Powell said there were a number of pressures and economic factors that emerged, particularly related to the Covid-19 pandemic which caused disruption of global supply chains.
He also alluded to Russia’s attack on Ukraine, which was a factor in inflation and supply chains.
(luc/luc)
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