(Finance) – The times are not yet ripe why the Fed halts interest rate adjustment path, which could reach a higher level than previously expected. This is what emerged from the press conference of the President of the Federal Reserve, Jerome Powellwhich confirms the “firm determination” of the central bank USDA to fight inflation., but also reports a slowing of the pace of adjustment.
Powell said the recent inflation figures were higher than expected and that the Fed will continue in the trajectory of increases of interest rates, even if it admits that “at a certain point” the pace of adjustment of the cost of money should be slowed down. The last level of rates – specified the number one of the US central bank – could be more than 4.6% indicated in September.
“I don’t think we have tightened too much”Powell specified, answering questions and reiterating “we still have space” to raise interest rates. “We need to see inflation drop significantly,” the President explained, signaling that a slowing of the pace of adjustment of the rate is closer and “could be at the next or next meeting“.
The FOMC today fully confirmed the expectations of a rate increase of 75 base greases, bringing the oscillation range at 3.75-4%. The Monetary Policy Committee said it was “strongly determined” to report inflation at a level of 2% in the long run and consider the increases progressive rates “appropriate” to hit the target.
“We have the tools to do this,” Powell reiterated at a press conference, recalling that price stability is the foundation of the economy.
“The most recent indicators point to modest growth in spending and production. Job increases have remained robust in recent months and the unemployment rate has remained low. Inflation remains high, reflecting imbalances in supply and demand linked to the pandemic, rising food and energy prices and wider price pressures “, reads the statement, which continues” Russia’s war against Ukraine is causing enormous human and economic hardship ” .
In light of all this, the FOMC promises that will continue to monitor the implications of macro data on the economic prospects and to appropriately adjust the stance of monetary policy should risks arise that could prevent the achievement of the set objectives. The evaluations of the Committee they will take into account a wide range of informationincluding public health data (Covid infections), labor market conditions, inflationary pressures and inflation expectations, and financial and international developments.