Jerome Powell: Bringing down US inflation will take time

The president of the US Federal Reserve (Fed), Jerome Powell, insisted yesterday that his institution remains committed to the mission of returning the inflation to 2% in the United States and affirmed that the economic data continues to indicate that it will take time.

“So far, the data has continued to support the committee’s view that bringing inflation down will take some time,” pointed out in a public act held in Washington.

However, Powell acknowledged that “the banking tensions” that emerged in early March, with several banks failing, possibly meant that the rate did not need to increase as much as it would have needed “if the banking crisis had not occurred.

“While financial stability tools have helped calm conditions in the banking sector, developments are contributing to tighter credit conditions and are likely to weigh on economic growth,” the Fed chair said.

Jerome Powell. The Federal Reserve steps on the accelerator to fight inflation. Photo: diffusion

Even so, he insisted, that the committee is strongly committed to bringing inflation back to the 2% target.

“We believe that failure to reduce inflation would not only prolong the pain, but would also ultimately increase the social costs of returning to price stability, which would cause even greater damage to families and businesses,” he added.

During the event, Powell offered no light on what will be the next decision of the Federal Reservewhether they will decide to continue raising rates or pause.

The next meeting of the Federal Open Market Committee of the Fed will take place on June 15 and 16.

Data

Figure. The annual variation rate of the CPI in the United States in April 2023 was 4.9%, 1 tenth lower than that of the previous month.

Rates. The types of interest They are currently between 5% and 5.25%. Future rate hikes will depend on macroeconomic figures.