The Chairman of the United States Federal Reserve, Jerome Powell, focused on the importance of a measured approach to monetary policy adjustments during his prepared statements.
He prepared it for the initial day of his testimony regarding the semi-annual Monetary Policy Report before the Senate Banking Committee. He articulated that the current policy framework is adequately equipped to tackle various risks and uncertainties.
Powell further noted that if the company continued to show its strength and inflation remained stable, the Fed could manage to maintain a restrained policy stance for a longer period.
On the contrary, he indicated that the Fed would be gearing up to ease policy if there is an unexpected downturn in the labor market. Or in a situation where inflation decreased more rapidly than anticipated.
Powell has acknowledged that while the overall US economy is strong, inflation is approaching the 2% target, however, it remains elevated. He issued a clarification that the ongoing review of the framework of the Fed will not alter the established inflation target of 2%. Also, he expects that the review will be concluded by late summer.
Powell, earlier this week presented the Semi-Annual Monetary Policy Report and testified before the Senate Banking Committee. This session was titled “The Semi-Annual Monetary Policy Report to the Congress.” It attracted significant attention from all the sectors of the financial markets.
During the testimony, Powell highlighted key insights from the recently published report by Fed which indicated that the financial conditions seem to be restrictive. He reiterated that future policy decisions will be informed by the data analysis which is going on. In addition to the long questionnaire session, it was expected that US representatives may look for Powell’s insights on how the policies of US President Donald Trump could impact inflation and the growth aspects of his monetary policy in the future.
Business Journalist
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