BSS-ENhrch_cat_news-33-5
BSS
  23 Oct 2021, 12:21

Fed's Powell says 'premature' to up rates despite inflation risk

   WASHINGTON, Oct 23, 2021 (BSS/AFP) - Despite a risk that high inflation in

the United States could persist, it would be "premature" to raise borrowing
rates and risk slowing the economic recovery, Federal Reserve Chair Jerome
Powell said Friday.

   The US central bank chief acknowledged that supply constraints and
shortages that have caused prices to rise sharply are "likely to last longer
than previously expected, likely well into next year."

   But at the Fed "we need to be patient," Powell said during a panel
discussion organized by South Africa's central bank.

   The Fed is "on track" to begin to pull back on its massive monthly bond
purchases, which would be completed by mid-2022, he said.

   But "it would be premature to actually tighten policy by raising rates now
with the effect and intent of slowing job growth."

   Policymakers are expected to announce the slowdown of bond buying at the
central bank's policy meeting early next month, but the benchmark lending
rate is forecast to remain at zero at least until late next year.

   Inflation in the United States has been running at more than double the
Fed's two percent target, but Powell said the supply bottlenecks are likely
to diminish, allowing inflation and wage pressures to retreat, which he
called the "most likely case."

   However, officials "need to be watching very carefully."

   He has pledged that the Fed will act to restrain inflation, if needed.

  • Latest News
  • Most View
Beta Version