Current:Home > MarketsFed Chair Jerome Powell warns the fight against inflation is far from over-LoTradeCoin
Fed Chair Jerome Powell warns the fight against inflation is far from over
View Date:2024-12-23 19:49:07
Federal Reserve Chair Jerome Powell said on Friday inflation is still too high, and he warned that restoring price stability will likely require an extended period of elevated interest rates.
Speaking to a gathering of economists and central bankers in Jackson Hole, Wyo., Powell said it's encouraging that inflation has cooled — from 9.1% last summer to 3.2% last month.
But Powell stressed some of the improvement could be temporary, and he reiterated the Fed is committed to getting inflation all the way down to their 2% target.
"The process still has a long way to go," Powell said. "We are prepared to raise [interest] rates further if appropriate, and intend to hold policy at a restrictive level until we are confident that inflation is moving sustainably down toward our objective."
The central bank has already raised its benchmark interest rate from near zero in early 2022 to just over 5.25% today — in the most aggressive series of rate hikes since the early 1980s.
Going into the Jackson Hole gathering, investors have been betting the Fed will leave rates unchanged at its next meeting in September. But Powell gave no assurances, saying he and his colleagues will be guided by incoming economic information.
"We are navigating by the stars under cloudy skies," Powell said. "We will proceed carefully as we decide whether to tighten further or, instead, to hold the policy rate constant and await further data."
A delicate balancing act
Anyone anticipating a rapid cut in interest rates would have been disappointed by Powell's remarks. He pointed to higher-than-expected GDP growth and robust consumer spending as signs that further rate hikes may be needed.
Rising interest rates have been a significant drag on the housing market. Mortgage rates have climbed to their highest level in more than two decades, and sales of existing homes have dropped sharply (although sales of newly-built homes, however, are on the rise).
Powell said he and his colleagues have a delicate balancing act, as they decide how high interest rates need to go to bring prices under control.
"Doing too little could allow above-target inflation to become entrenched," he said. "Doing too much could also do unnecessary harm to the economy."
A survey of business economists released earlier this week showed nearly three-quarters believe the Fed's interest-rate policy is "about right." Nearly 70% of forecasters surveyed say they're at least "somewhat confident" the Fed can achieve a "soft landing," curbing inflation without tipping the economy into a recession.
veryGood! (9473)
Related
- Vermont man is fit to stand trial over shooting of 3 Palestinian college students
- Scientists discover 350,000 mile tail on planet similar to Jupiter
- A British postal scandal ruined hundreds of lives. The government plans to try to right those wrongs
- Michael Strahan and daughter Isabella, 19, reveal brain tumor diagnosis on 'GMA'
- Taylor Swift drops Christmas merchandise collection, including for 'Tortured Poets' era
- 'Devastating case': Endangered whale calf maimed by propeller stirs outrage across US
- Ohio House overrides governor Mike DeWine's veto of gender-affirming care ban
- Jennifer Lawrence recalls 'stressful' wedding, asking Robert De Niro to 'go home'
- Social media star squirrel euthanized after being taken from home tests negative for rabies
- Deion Sanders thinks college football changed so much it 'chased the GOAT' Nick Saban away
Ranking
- Alexandra Daddario Shares Candid Photo of Her Postpartum Body 6 Days After Giving Birth
- Record 20 million Americans signed up for Affordable Care Act coverage for 2024
- Pat McAfee says Aaron Rodgers is no longer appearing on his show
- Michigan basketball's leading scorer Dug McDaniel suspended for road games indefinitely
- Disruptions to Amtrak service continue after fire near tracks in New York City
- Tired of waiting for the delayed Emmys? Our TV critic presents The Deggy Awards
- Blood tests can help diagnose Alzheimer's — if they're accurate enough. Not all are
- Alaska Airlines cancels all flights on 737 Max 9 planes through Saturday
Recommendation
-
Song Jae-lim, Moon Embracing the Sun Actor, Dead at 39
-
What is the birthstone for February? A guide to the month's captivating gem.
-
'Golden Bachelor' host Jesse Palmer welcomes baby girl with wife Emely Fardo Palmer
-
Calvin Klein's FKA twigs ad banned in U.K. for presenting singer as 'sexual object'
-
Kevin Costner says he hasn't watched John Dutton's fate on 'Yellowstone': 'Swear to God'
-
President Joe Biden’s record age, 81, is an ‘asset,’ first lady Jill Biden says
-
Deion Sanders thinks college football changed so much it 'chased the GOAT' Nick Saban away
-
NYC issues vacate orders to stabilize historic Jewish sites following discovery of 60-foot tunnel