According to Jerome Powell, the head of the US central bank (Fed), inflation in the country is still too high compared to the target of two percent.
– A few months of good statistics is just the beginning of what is needed to build confidence that inflation is sustainably moving down towards our target, Powell said in a speech at a conference in New York on Thursday.
His choice of words seems to point in the direction of a possible new increase in the policy rate at the Fed executive meeting in early November.
The New York Stock Exchange climbed
The market initially received the news in good spirits. The New York stock market climbed slightly when Powell spoke and the 10-year Treasury yield fell a bit, but then the mood and the arrows turned the other way again.
Powell says the growth and labor market numbers will determine whether further interventions with the interest rate tool will be required or not.
For the past year, the Fed has waged a battle in the form of interest rate hikes to slow inflation. With a key interest rate of 5.25-5.50 percent – the highest level in 22 years – it is a hot question whether the central bank now considers the interest rate to have peaked.