The Chairman of the Fed, Jerome Powell today appeared to comment on the economic development of the United States (U.S.). According to him, the U.S. job market is still far from what the Fed had hoped for before reducing stimulus to the economy. On the other hand, inflation growth is expected to start to slow in the coming months.
According to Powell, ‘inflation has recorded a significant increase and will probably continue to record high readings at a slower rate but it will start to flatten after that’. With this, Powell once again put an emphasis on the Fed’s principle of current price increases despite concerns over the matter. However, according to them, this is because it is related to the reopening of the economy, so this increase is temporary.
Powell added that at the same time, employment data is still not satisfactory enough to cover the 7.5 million jobs that have been lost due to the pandemic. In addition, workers also face low wages and still struggle with stress.
If it can be concluded, Powell argues that this rapid recovery will allow millions of people to return to work, inflation will continue to continue over time by being around the 2% target rate and in no time a reason to tighten monetary policy in the near future.
Continued Fed bond purchases and targeted interest rates of near zero “will ensure that monetary policy will continue to provide strong support to the economy until the recovery is complete,” Powell said.
Powell is expected to give a speech at 12 a.m. tonight. At the Fed’s last policy meeting, there were some policymakers who argued that the Fed might tighten policy in the near future.
So far there has been no comment from Powell on the risks of the emergence of Delta variants.
