President of the United States Federal Reserve (Fed), Jerome Powellhe said at an event at Spelman College in Georgia this Friday. Inflation “on the right track” And He emphasized the importance of acting prudently in monetary policy.
“Inflation is still above our target, but it’s on the right track. So we think the right thing to do now is to proceed cautiously, think carefully about how events will develop, and let the data speak for itself,” Powell said. said. The latest information points to underlying inflation dampening due to rising fluctuations in food and energy “around 2.5 percent.”
The head of the North American export institute assured that the boom cycle carried out puts pressure on economic activity, given its restrictive nature. However, he added that hardening is possible.or referred to as “delayed” and probably effects “not yet fully manifested”.
However, the Fed’s response to the rising cost of living served to preserve both the agency and its credibility. “Strongly fixed inflation expectations of economic units”.
Powell reiterates Fed remains ‘very committed’ on issue Reducing inflation to 2% over timeA restrictive policy will need to be maintained until the price increase approaches this target. “It would be premature to assume or speculate that we have reached a sufficiently restrictive tone,” he summarized.
In fact, the Fed President also reminded that if necessary, the interest rate will be increased again, but the decisions are taken in meetings, taking into account the integrity of the data and its effects on economic activity and inflation, as well as its reflections on economic activity and inflation. risk balance”.
Predictions
Regarding the future, Powell argued: Labor market “remains strong” and it will slow down creating jobs at “more sustainable levels”.
Powell noted that consumption has been “very strong” due to pent-up demand during the pandemic, but that this phenomenon may be ending due to an increase in credit card use and defaults.
Similarly, he explained that GDP for the third quarter is likely to have a “very, very solid” sign, although he believes it will moderate, but acknowledged that available data is “still limited.”
Powell, on the other hand, cited artificial intelligence (AI) to pursue this. We are in the early stages of implementing this technology.So there’s “a lot of uncertainty” about whether this will clearly help create jobs or destroy them.