Jerome Powell, chairman of the Federal Reserve, reaffirmed his commitment to reducing inflation by stating on Tuesday that he will support interest rate hikes until prices return to a healthy level.
In a live-streamed interview with the Wall Street Journal, the head of the central bank stated, “If that requires us to move beyond neutral levels, we will not hesitate to do so.” “We will continue until we reach a point where we can say that financial conditions are appropriate and inflation is declining.
“We will reach that point. “There will be no doubt about that,” he added.
The Fed raised benchmark interest rates by a half percentage point earlier this month, the second increase of 2022 as inflation approaches a 40-year high.
Following this increase, Powell stated that similar 50 basis point moves were likely at subsequent meetings so long as current economic conditions persisted.
On Tuesday, he reaffirmed his dedication to bringing inflation closer to the Fed’s 2 percent target and cautioned that it may not be easy and may come at the expense of a 3.6 percent unemployment rate, which is just above the lowest level since the late 1960s.
“Even with a slight increase in unemployment, the labor market would remain robust,” he said. “There are a number of plausible routes to a soft, or softish, landing,” I would say. Our job is not to predict the odds, but to attempt to do so.”
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