Fed President reaffirmed the Central Bank’s commitment to bring the country’s inflation to the 2% target
The president of the Fed (Federal Reserve, the Central Bank of the United States), Jerome Powell, reaffirmed this Wednesday (June 14, 2023) the commitment of the financial authority to bring inflation to the 2% target. The bank stopped a sequence of increases in the country’s interest rate. Rates will continue to range from 5% to 5.25%. Powell said the goal is to maintain maximum employability with prices under control.
“Inflation remains well above our long-term 2% target”disse Powell. “We understand the difficulties that high inflation is causing and we remain strongly committed to bringing inflation down to our 2% target”. Read the full statement (108 KB in English).
According to him, it is possible that the committee will still determine interest rate increases in 2023. “Almost all Committee participants consider it likely that some additional rate hikes will be appropriate this year to bring inflation down to 2% over time”disse Powell.
The Fed chairman said that the FOMC (Federal Open Market Committeeequivalent to Copom) “significantly tightened the stance of monetary policy” with the increase in the basic interest rate by 5 percentage points since the beginning of 2022.
The President stated that “will have more to say on monetary policy after a brief review of economic developments”. In the statement, Jerome Powell said that the unemployment rate rose in the country, but remained low in May of this year, at 3.7%. For him, “there are signs that supply and demand in the labor market are balancing better”.
COMMUNICATION FROM THE FED
The Fed said this Wednesday (June 14, 2023) that recent indicators suggest that economic activity continues to expand at a modest pace. But he also pondered that inflation remains high.
The US monetary authority is aiming to achieve maximum employment beyond the 2% rate of inflation. If the Fed raised interest rates by another 0.25 percentage point, the rate would reach the highest level since January 2001. Despite not having raised the level, the Central Bank of the United States stated that it will continue to monitor the scenario and is “prepared” to adjust the monetary policy stance as appropriate “if risks arise that could prevent the achievement of its goals”.