Powell Endorses Gradual Hikes, Sees Strong Growth Continuing
Friday, 24 August 2018 21:32 WIB | FISCAL & MONETARY |The Fed

Federal Reserve Chairman Jerome Powell endorses further, gradual increases in interest rates, saying that strategy is the best way to steer between the risks of doing too much and harming the economy or doing too little and letting it overheat.

œI see the current path of gradually raising interest rates as the FOMC™s approach to taking seriously both of these risks, he says in text of speech at Fed™s annual policy symposium in Jackson Hole, Wyoming

œWith solid household and business confidence, healthy levels of job creation, rising incomes, and fiscal stimulus arriving, there is good reason to expect that this strong performance will continue

œI am confident that the FOMC would resolutely ˜do whatever it takes™ should inflation expectations drift materially up or down or should crisis again threaten

œWhile inflation has recently moved up near 2 percent, we have seen no clear sign of an acceleration above 2 percent, and there does not seem to be an elevated risk of overheating

œThis is good news, and we believe that this good news results in part from the ongoing normalization process, which has moved the stance of policy gradually closer to the FOMC™s rough assessment of neutral as the expansion has continued

œAs the most recent FOMC statement indicates, if the strong growth in income and jobs continues, further gradual increases in the target range for the federal funds rate will likely be appropriate

Source : Bloomberg

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