Fed, Powell: “Inflation is a serious threat, ready for more rate hikes”
The leap in inflation “is a serious threat” to the US economy and in particular for “achieving maximum employment”, but self to the Federal Reserve “should we see that remains at high levels for longer than expected e we had to raise interest rates several times, we will do it”. It is a relentless fight against the impetuous growth of prices what Jerome Powell he proclaimed in the hearing at the Banking Commission of the Senate for his reconfirmation at the helm of the Federal Reserve.
Speaking on the eve of the new report which should certify inflation rising to 7%, the maximum of the last 40 years, Powell, in a sense, heralded the end of an era for monetary policy in recent years: “Monetary policy must have one broad and far-sighted vision, in step with a constantly evolving economy “he underlined, adding that the American economy” no longer needs or does not want “the” strongly accommodative “policies adopted after the outbreak of the coronavirus pandemic, anticipating the need to move towards” more normal conditions “.
“Today the economy is growing at the fastest pace in recent years and the job market is strong “ he recalled. But now this recovery – he reiterated – could be jeopardized if inflation were to ‘take root’ at the current high levels: “To get the very strong job market we want and with a high level of participation, it will take a long expansion“but to reach it” we will need stable prices “.
Even before the first of three rate hikes expected in 2022, “but it will depend on the data” the choice of the number of interventions, explained the number one of the Fed, the US central bank will still have to start reducing its balance sheet: Powell, who spoke of a “long” way to return to a “normal” monetary policy. “I expect this 2022 to be a year in which we will take steps towards normalization“of the Federal Reserve’s monetary policy, said Powell, for which the” exit “process, with the reduction of the balance sheet by stopping the reinvestment of maturing bonds, should be” earlier and faster “than in past.
Meanwhile, in the wake of the positive closing of Wall Street followed by the reassuring words of Jerome Powell in the US Senate, the main ones European stock exchanges, after an entirely positive opening, reduce earnings but they always go up pending the American inflation data. TO London the Ftse 100 advances by 0.69%, a Frankfurt the Dax rose by 0.32%, a Paris the Cac 40 earns 0.47%. TO Milan the Ftse Mib marks + 0.10%.
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