ALBAWABA - The US Federal Reserve Chair, Jerome Powell, expressed caution about future interest rate decreases in a major speech to foreign markets. He emphasized that such actions should not be taken unless there is a strong sense of persistent inflation reduction.
In his remarks at the Macroeconomics and Monetary Policy Conference of the San Francisco Fed, Powell assessed the US's current inflation rate, which is 2.5 percent per year. He emphasized the need to avoid overreacting to small steps forward in the fight against inflation, saying that more data is needed before considering an interest rate change.
Powell acknowledged that monetary policy changes will be required if the projected trajectory of inflation does not materialize, but he expressed optimism that it will decrease gradually to the target rate of 2 percent.
Powell emphasized the robustness of the job market, with unemployment continuously falling below 4 percent for a prolonged period of time, while underscoring the tenacity of the American economy. He did, however, warn against making hasty interest rate changes because to the possibility of inflation returning.
Powell reaffirmed the Federal Reserve's determination to prioritize consistent reductions in inflation, acknowledging that this goal is doable. He also downplayed worries about an imminent recession, saying that experts do not see it as happening more frequently.
Powell's speech highlights the Fed's prudent approach to interest rate policy, emphasizing the stability of the US economy in the face of uncertainty in the global economy and placing a high priority on a detailed analysis of inflation trends.
