US Federal Reserve Chairman Jay Powell warned that reducing the inflation rate in the United States to the target set by the Central Bank of America of 2%, would cause some pain, adding that addressing the problem of high prices without causing a recession may depend on factors outside his control.
The British Financial Times said Powell's comments come amid great uncertainty about the economic outlook, as the Federal Reserve begins what is likely to be the fastest monetary tightening in years.
The British Financial Times said Powell's comments come amid great uncertainty about the economic outlook, as the Federal Reserve begins what is likely to be the fastest monetary tightening in years.
And the Federal Reserve, the US central bank, had raised the interest rate by 0.75 from levels closer to zero, which were set since the early days of the Corona epidemic, to raise the interest rate by half a percentage point last week.
These steps are part of the bank's plans to shift the policy to a neutral environment that no longer stimulates demand. The central bank will also start reducing its $9 trillion balance sheet next month.
In an interview with Market Plus, Powell affirmed the Federal Reserve's commitment to reduce inflation and stressed the challenges they face in achieving this without causing job losses or possibly a recession.
The process of lowering inflation to 2% would also involve some pain, Powell said, but in the end, the most painful thing would be failure to deal with it, and inflation in the economy taking hold at high levels.
The question of whether or not a smooth landing is possible, Powell said, may in fact depend on factors that they do not control. He went on to say that they have to control what can be controlled, and there is work to be done on demand.