He Federal Reserve Chairman Jerome Powellstated this Thursday that They are not confident that they have achieved a “monetary policy stance that is sufficiently restrictive to reduce inflation to 2% over time”. Powell participates in a round table on the challenges of monetary policy in a global economy organized by the International Monetary Fund.
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My colleagues and I are pleased with these advances, but We hope that the process of sustainable reduction of inflation to 2% still has a long way to go.
The labor market remains tense, although the improvement in labor supply and the gradual relaxation of demand continue to improve its balance. Gross Domestic Product growth in the third quarter was quite strong, but like most analysts, we expect growth to moderate in the coming quarters. Of course, that remains to be seen, and we are alert to the risk that stronger growth could undermine progress in restoring labor market balance and reducing inflation, which could justify a monetary policy response.
The Federal Open Market Committee (FOMC) has committed to achieving a monetary policy stance tight enough to reduce inflation to 2% over time; We are not confident that we have achieved this orientation..
We know that progress towards our 2% objective is not assured: Inflation has given us some headaches. If it is appropriate to tighten monetary policy further, we will not hesitate to do so.
We are making decisions on a meeting-by-meeting basis, based on the totality of incoming data and its implications for the outlook for economic activity and inflation, as well as the balance of risks, determining the degree of further policy tightening that may be appropriate to return inflation to 2% over time. We will continue at it until we have finished our work.
Market reaction
The dollar rose across the board following Powell’s initial comments. DXY rose towards six-day highs at 105.90 and EUR/USD retreated towards 1.0665.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
