NEWS
23
2023
-
02
The chairman of the Federal Reserve made a ruthless statement: Even if it has an impact on the short-term economy, inflation must be controlled
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Fed Chairman Jerome Powell's nomination for re-election has been confirmed by the Senate, and he is facing the challenge of fighting the worst inflation in the United States in 40 years.
On May 12, local time, the US Senate confirmed Powell's nomination for a second term as chairman of the Federal Reserve with 80 votes in favor and 19 against. At the end of last year, US President Joe Biden nominated Powell for a second term as chairman of the Federal Reserve.
On the same day, Powell said in an interview with a radio program that the Fed is ready to do its best to bring inflation back to the 2% target, even if it has an impact on the short-term economy.
Data released by the Bureau of Labor Statistics showed that the US CPI rose 8.3% year-on-year in April, down from 8.5% in March, but still exceeded market expectations.
"The process of pulling inflation back to 2 percent will be painful, but the greater pain is that we have failed to fight inflation," Powell said. ”
On May 4, the Federal Open Market Committee announced that it would raise the target range of the federal funds rate to a range of 0.75%-1.00%, the first time in nearly 20 years that the Fed raised interest rates by 50 basis points. In addition, the Fed decided to reduce its holdings of U.S. Treasuries, agency debt and agency mortgage-backed securities starting June 1, initially to $47.5 billion per month and increasing to $95 billion per month three months later.
At the press conference after the meeting, Powell said that assuming economic and financial conditions are in line with expectations, a single 50 basis point rate hike in the next two or three meetings is a possible option with general support from the committee. However, the Open Market Committee is not actively considering a single 75 basis point rate hike.
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