In a speech by the chairman of the Fed, Jerome Powell recently stated that the United States (U.S.) economy continues to make progress towards the benchmark set by the Fed to reduce the Covid-19 stimulus. Powell once again maintained his view that high inflation was only temporary.
In a speech prepared for a speech to the Jackson Hole economic conference, Powell signaled that the U.S. central bank would still maintain policy practices until the U.S. could chill out full jobs.
Powell did not give a decision on a $ 120 billion reduction in monthly asset purchases but gave an indication by stating the Fed's target is to reach a full workforce. At the same time, the Fed will focus on the contagion of the Delta variant to assess the impact and risks to the economy.
This indirectly carries the indication that there has not been a decision on when the reduction in bond purchases will be made as the focus at this point is on the health and economic risks posed by the Delta variant.
Hopes for continued job growth are partly based on schools that will reopen.The Fed’s policymakers hope to see continued job creation and at the same time continue to conduct detailed studies on the impact of delta variants.
Finally, Powell still maintains the stance that high inflation is only temporary. He opined that high inflation was due to supply chain disruption factors and was now declining.
