English
Powell: We are concerned about keeping interest rates high for a long time
US Federal Reserve Chairman Jerome Powell expressed concern on Tuesday that keeping interest rates too high for a long period could jeopardize economic growth.
The Fed Chairman stressed that “interest rates will not be reduced until we have sufficient confidence that inflation will fall to about 2%,” noting that the data for the first quarter of 2024 did not give us sufficient confidence to reduce interest rates, but the recently released inflation data showed progress.
Powell said that high inflation is not the only threat he faces, noting that restricting policies too late, or too little, could unjustifiably weaken economic activity and employment.
He added in his speech before the US Congress that when considering amendments to the target range for the federal funds interest rate, the committee will continue its practice of carefully evaluating the data received, its effects on expectations, the balance of risks, and the appropriate path for monetary policy.
In a prepared two-day appearance on Capitol Hill before Congress this week, the central bank chief said the economy remains strong as does the labor market, despite some recent slowdown.
Powell noted some decline in inflation, saying policymakers remain determined to lower their 2% target.
In prepared remarks, Powell said, "At the same time, given the progress made in lowering inflation and cooling the labor market over the past two years, high inflation is not the only risk we face." Reducing political restrictions too late or too little could unjustifiably dampen economic activity and employment.
