The Federal Reserve
All eyes are on the Federal Reserve as they continue to ratchet up interest rates in response to runaway inflation. The 75-basis increase is likely to be followed by more interest rate action as long as inflation remains at record levels. Federal Reserve Chairman Jerome Powell recently went before Congress to outline their strategies and commitment to tackling the inflation problem in the United States.
The article I have referenced about Chairman Powell is available on CNBC.com and an excerpt is provided below.
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Federal Reserve Chairman Jerome Powell told congressional lawmakers Wednesday that the central bank is determined to bring down inflation and has the ability to make that happen.
“At the Fed, we understand the hardship high inflation is causing. We are strongly committed to bringing inflation back down, and we are moving expeditiously to do so,” the Fed chief said in remarks for the Senate Banking Committee. “We have both the tools we need and the resolve it will take to restore price stability on behalf of American families and businesses.”
Along with expressing resolve on inflation, Powell said economic conditions are generally favorable, with a strong labor market and persistently high demand.
However, he acknowledged that inflation is running too hot and needs to come down.
“Over coming months, we will be looking for compelling evidence that inflation is moving down, consistent with inflation returning to 2%,” Powell said. “We anticipate that ongoing rate increases will be appropriate; the pace of those changes will continue to depend on the incoming data and the evolving outlook for the economy.”
He noted that the war in Ukraineand Covid-linked shutdowns in China are adding to inflation pressures, and added that the problem is not unique to the U.S. but is affecting many global economies.
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