Economic Update – Federal Reserve Insights
Jerome Powell, Chair of the US Federal Reserve, affirmed on Tuesday that there is no immediate need to modify the current American monetary policy.
During his testimony before the Senate Banking Committee, Powell emphasized that a reduction in interest rates is unnecessary due to the overall strength of the economy. He highlighted the decline in unemployment rates and noted that inflation remains above the Federal Reserve’s target of 2%.
Powell stated that the current monetary policy is well-positioned to navigate potential risks and uncertainties. He remarked, “We can maintain tighter monetary policy for an extended period if the economy continues to perform strongly and if inflation does not trend down towards our 2% target.”
The Federal Reserve Chair acknowledged that a shift towards a more accommodative monetary policy could be considered if the labor market exhibits unexpected weakness, or if inflation decreases more rapidly than anticipated.
In summary, Powell noted, “The American economy remains robust, and while inflation is inching closer to our 2% goal, it continues to be relatively elevated.”
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