Federal Reserve Chairman Powell: We are ready for further interest rate increases

In his meeting at the Jackson Hole Symposium, Federal Reserve Chairman Powell conveyed the message, “We intend to keep our policy at a restrictive level until we are confident that inflation will sustainably progress towards our target.” Powell’s remarks, similar to his previous speech, caused fluctuations in the market.

Jerome Powell, the Chairman of the US Federal Reserve (Fed), stated that they were prepared to further increase interest rates if deemed appropriate, adding “We intend to keep our policy at a restrictive level until we are confident that inflation will sustainably progress towards our target.”

POWELL COULD CONVEY MESSAGE INFLATION WOULD BE BROUGHT DOWN TO 2 PERCENT

During his speech at the Jackson Hole Economic Policy Symposium hosted by the Kansas City Fed, Powell talked about monetary policy and price stability. In his speech at the symposium with this year’s theme “Structural Changes in the Global Economy,” Powell noted that, just like last year, he would convey the message that they would work to bring inflation down to the 2 percent target.

Powell explained that the decrease in headline inflation is good news, but global factors that maintain the volatility of food and energy prices could give misleading signals about the direction of inflation. Pointing out that annual core consumer inflation was still high, Powell highlighted that there was still a long way to go to return to price stability.

HIGHER-THAN-TREND GROWTH MAY REQUIRE FURTHER TIGHTENING

Powell discussed consumer inflation components such as goods, housing services, and non-housing services, stating that core goods inflation, especially for durable goods like vehicles, had decreased due to both tightening monetary policy and the resolution of supply-demand imbalances.