The fed is seeing inflation before cutting interest rates.
Jerome Powell addressed the
following points:
1. We need to see more progress to beat inflation.
2. FED must be certain before making any new decision on cutting interest rates.
3. If we see labour market is going to weak. A quick action would be taken.
4. We are very much aware of the risk of starting too early or too late when to cut interest rates.
5. In the services sector inflation is often resistant to decline.
6. Wage increases is on downward path to more sustainable levels.
7. Wage increases are observed and they are still above the equilibrium levels.
8. Inflation is expected to return to the 2% late next year or it is also possible the following year.
9. When it was asked about the current political situations and the impact on monetary policy, Jerome Powell strongly supported the independence of the Federal Reserve in the United States.
10. as far as the US deficit is concerned it is extremely large and it will also require a quick action as soon as possible because it is better to do sooner rather than later.
11. Most people believe that we will not be in a situation to go back to that era of extremely low rates but no one knows for sure.
12. According to Jerome Powell he said would be very happy if he unemployment rate in US stabilises at the right time.
13. The rate of unemployment which is 4% is still considered as very low.
14. Inflation should be at or below 2% a year from now.
