Powell: US Federal Reserve considers it necessary to raise interest rates further
WASHINGTON, February 1 – RIA Novosti. Fed Chairman Jerome Powell said the Federal Reserve will likely raise interest rates further to contain inflation, which is still very high despite its slowdown in recent months.
He warned that tackling inflation could lead to lower economic growth and complexity in the labor market, which, despite the results achieved, has not yet suffered.
“The (Open Markets) Committee clearly doesn’t believe it’s time for a break… We continue to believe it would be appropriate to further increase the target range to achieve a sufficiently restrictive monetary policy situation to bring inflation down to 2%,” said Powell.
Earlier on Wednesday, the Fed increased the discount rate by 25 basis points.
“Reducing inflation may require a period of below-potential growth and some deterioration in labor market conditions. Price stability needs to be restored to create conditions for maximum employment and long-term price stability,” Powell said. said.
He said the Fed had managed to bring inflation down to 6.5% without slashing the labor market, but conceded it was too early to celebrate victory – the rate of price growth is still too high.
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