At the same time, in a panel discussion at the International Monetary Fund, Powell did not rule out another rate hike to help reduce inflation to the Fed's 2% target level. Inflation, as measured by the U.S. consumer price index, has sunk from a 9.1% peak last year but is still 3.7%.
"We are not confident," Powell said, that the Fed's benchmark rate is high enough to steadily reduce inflation to 2%.
He added: "We know that ongoing progress toward our 2% goal is not assured. Inflation has given us a few head fakes!"
Powell noted, for example, that inflation had declined for five straight months during 2021 before reversing later that year and heading higher.
He said that "if it becomes appropriate" to raise rates further,"we will not hesitate to do so, a phrasing that suggests that for now it isn't appropriate to increase the Fed's benchmark rate.
For now, the Fed chair said, he believes the central bank faces nearly equal risks of raising its benchmark rate too high, which could derail the economy, or not raising it high enough, which could allow inflation to persist or worsen.
This story is from the November 11, 2023 edition of Techlife News.
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This story is from the November 11, 2023 edition of Techlife News.
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