Jerome Powell (head #FED ) spoke before the US Senate Banking Committee with a report on monetary policy:
✔ Do not lower interest rates until the Fed is confident that inflation will decrease continuously.
✔ Higher inflation is not the only risk we face.
✔ More good macro data will strengthen our confidence in the inflation path to 2%. (Q1 data remains inconclusive)
✔ Restrictive monetary policy helps reduce inflation.
✔ Risks from the Fed's dual mandate are balanced.
✔ The US economy continues to grow at a strong pace.
✔ GDP growth slowed in the first half of this year, after impressive growth in the second half of last year.
✔ Domestic private demand remains strong, consumer spending growth is slower but still strong.
✔ Labor market conditions have returned to pre-pandemic levels—strong but not overheating.
✔ Unemployment rate increased but remained low at 4.1%.
✔ Inflation has decreased significantly over the past few years but is still higher than the target of 2.0%.
✔ Cutting Fed rates too soon or too large could slow or even reverse the progress we have seen on inflation + weaken economic activity and employment.
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