Federal Reserve Chairman Jerome Powell said the US economy, while otherwise strong, had not seen inflation return to the central bank’s target.
Speaking to a policy forum focused on US-Canada economic relations, Powell said that while inflation continues to fall, current policy must remain intact.
“More recent data points to solid growth and continued strength in the labor market, but also a lack of further progress so far this year in returning to our 2% inflation target,” the Fed chief said during a panel speech.
Echoing recent statements by central bank officials, Powell indicated that the current level of policy is likely to remain in place until inflation approaches target.
As of July 2023, the Fed has kept its benchmark interest rate at a target rate of between 5.25%-5.5%, the highest in 23 years. That was the result of 11 consecutive tariffs that began in March 2022.
“The recent data has clearly not given us greater confidence, and instead indicates that it will probably take longer than expected to achieve that confidence,” he said. “That said, we think policy is well positioned to address the risks we face.”
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