Federal Reserve Chairman Jerome Powell said on the 25th (local time) that “we will maintain monetary policy at a tight level until we are confident that inflation is continuing to fall toward the target level.”
“We are prepared to raise interest rates further,” Powell said in a speech at the opening of an economic policy symposium hosted by the Federal Reserve Bank of Kansas City in Jackson Hole, Wyoming, on the same day.
Commenting on current price levels, he said, “inflation has come down from its peak, which is a welcome development, but it remains at a high level.”
“The slowdown in core inflation in June-July is welcome,” said Powell, “but the good data over the past two months is just the beginning of building confidence that inflation is continuing to fall toward target.” .
Regarding the economic outlook, he said, “As the pandemic-related distortions ease, it is putting downward pressure on inflation,” but “tight monetary policy will play a more important role nonetheless.”
Chairman Powell’s diagnosis is that in order to sustainably lower inflation to the target of 2%, lower-than-trend economic growth and relief from overheating of the labor market are needed.
“We expect labor market rebalancing to continue,” he said, “but if there is evidence that labor market overheating is not sustained, this will also require a monetary policy response.”
This means that further rate hikes are possible if the labor market does not calm down.
Meanwhile, Chairman Powell said the Fed would keep inflation at its 2% target.
Recently, some in the business world have raised the need to raise the 2% inflation target from the current level to reflect structural changes in the economy, but it seems to have been dismissed.
[사진 출처 : UPI=연합뉴스]
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2023-08-25 14:33:00
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