“We need more evidence to be sure of lowering inflation… stay on track until we reach our goal”
Regarding the debt ceiling problem, “watch the financial market impact… the only solution is to raise the limit of Congress”
(Washington Reuters = Yonhap News) Federal Reserve Chairman Jerome Powell speaks during a news conference after the Fed raised interest rates at the Federal Reserve Building in Washington, DC, on Wednesday (local time). 2023.2.1
(Washington = Yonhap News) Correspondent Kim Dong-hyun = US Federal Reserve (Fed · Fed) Chairman Jerome Powell announced on the 1st (local time) that he would continue austerity for the time being to catch high inflation.
Chairman Powell said at a press conference after the regular Open Market Committee (FOMC) meeting that day, “Inflation has eased recently, but it is still too high.”
“While recent developments are encouraging, we need considerably more evidence to be confident that inflation is on a sustained downward curve,” he said, referring to the slowing pace of inflation in the latest three-month price index.
He said that disinflation (relief of inflation) has begun in commodity prices, such as an improvement in the core PCE (personal consumption expenditure) price index, but there is no such movement in the housing market and service industry yet, saying, “It is too early to declare victory.”
As for lowering the rate hike rate to 0.25 percentage point at the regular meeting, he said it would help determine how close the economic situation is to meeting the Fed’s target and how much future rate hikes will be needed to sufficiently maintain the tightening stance.
“History strongly warns against easing monetary policy too soon. We will remain on course until we achieve our goal,” he said, adding that if we want to keep employment at its highest level and price stability in the long term, we must control prices now. said.
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He said it would take “a couple more rate hikes” to tighten to an appropriate level.
Previously, at a regular meeting in December last year, FOMC members proposed a range of 5.00-5.25% (median 5.1%) as an appropriate rate level for the end of this year.
Since the Fed raised the interest rate to 4.50-4.75% on this day, it is a figure that only needs to be raised twice more by 0.25 percentage points in the future.
Meanwhile, the FOMC, in its regular meeting statement, listed the factors to consider when deciding on a future rate hike, omitting the ‘public health’ situation it had been mentioning.
When asked if the Fed is no longer considering COVID-19 as a burden on the economy, Powell said, “That’s the general idea.”
“Personally, I’m well aware that COVID-19 is still a pandemic, but it doesn’t play a major role in the economy anymore,” he said.
Chairman Powell was infected with Corona 19 on the 18th of last month.
As for raising the federal debt ceiling, he said, “There is only one solution, and that is for Congress to raise the debt ceiling so that the US government pays off all its debt on time. Any deviation from that would be very dangerous.”
As for the impact of the debt ceiling issue on austerity measures, it is difficult to predict, but it is being monitored.
“I don’t think there will be any significant interaction between the two, because I believe that Congress will do what it says and eventually raise the debt ceiling so that inflation and our economic and financial performance are not jeopardized,” he said. because,” he said.
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2023/02/02 06:20 Send
