US Fed Chair Powell Maintains Hawkish Stance on Rates
While inflation has slowed, the journey down to 2% is not over and the Federal Open Market Committee will act as needed, Federal Reserve Chair Jerome Powell said in prepared remarks during a live panel discussion at the 24th Jacques Polak Annual Research Conference.
“US inflation has come down over the past year but remains well above our 2% target,” Powell said. My colleagues and I are gratified by this progress but expect that the process of getting inflation sustainably down to 2% has a long way to go.”
Powell noted that labour markets are still tight and GDP growth was strong in Q3, with expectations for a moderation in coming quarters. However, the FOMC will be attentive to a stronger-than-expected outcome that could require further action from the Fed.
“The FOMC is committed to achieving a stance of monetary policy that is sufficiently restrictive to bring inflation down to 2% over time; we are not confident that we have achieved such a stance,” Powell said, citing previous “head fakes” from inflation.
“If it becomes appropriate to tighten policy further, we will not hesitate to do so,” Powell added.
“We will continue to move carefully, however, allowing us to address both the risk of being misled by a few good months of data and the risk of over tightening.” The FOMC will continue to make decisions meeting by meeting but will “keep at it until the job is done.”
