The US Federal Reserve chief said that interest rates would not be raised preventively for fear of inflation.
–
(Photo: AP)
–
–
–
–
New York According to Fed Chairman Jerome Powell, the central bank will remain patient despite the soaring inflation in the US. Like the data on the labor market and economic growth, the price increases are the result of the “unusual situation” in the subsiding pandemic, he said on Tuesday in front of the Corona subcommittee in Congress. The central bank will not increase interest rates preventively for fear of inflation, he stressed.
The price jumps are largely due to the reopening of the economy, as can be seen from the used cars that have become more expensive. You still need “a little patience” to see what is really going on. But the observed effects do not speak in favor of a largely strained economy that would require higher interest rates.
Consumer prices (CPI) had recently risen sharply: They climbed by 5.0 percent and thus more strongly than they have been for around 13 years. Powell replied to a question before the committee whether such a level was acceptable to him: “No.” But he sees the price increase as a temporary phenomenon.
The Fed chief also assumes that the labor market will make significant progress over the course of the year: “I think we will see a strong increase in jobs in the fall.” The Fed has given the direction that it will increase the monthly dose of its cash injections Seeks to maintain a level of $ 120 billion until significant progress is made on price stability and employment.
Top jobs of the day
Find the best jobs now and
be notified by email.
–
–
–
After the most recent interest rate meeting, Powell had signaled that a plan to melt down bond purchases should the upswing persist at the upcoming meetings. Given the strong upswing, the Fed head of the San Francisco District, Mary Daly, may be able to shut down her purchases as early as the end of this year or early 2022.
In view of the long-term crisis, the Fed had recently left the key interest rate in the range of zero to 0.25 percent. However, for the first time since the outbreak of the pandemic, the monetary authorities signaled that there could be an increase in 2023.
More: There have been strong reactions to the Fed meeting on the foreign exchange and commodities market. What the outlook for gold and bonds is – and why the stock market barely reacts.
–
– .
