Powell: The Fed’s commitment to fight inflation is “unconditional”

Powell: The Fed’s commitment to fight inflation is “unconditional”
Powell: The Fed’s commitment to fight inflation is “unconditional”

Hawk approach

Powell and his colleagues have turned aggressively to combat the hottest inflation in 40 years, amid criticism that they have been too soft on monetary policy for too long as the economy recovers from the effects of the coronavirus. They raised interest rates by 1.5 percentage points this year, and officials expect to tighten further by about 1.75 percentage points in 2022.

The turnaround shook financial markets, with investors worried that the Federal Reserve would trigger a recession. Powell told lawmakers Wednesday that such an order is “certainly possible,” although it’s not something the Fed is targeting, or believed to be necessary to bring inflation down to the central bank’s 2% target.

Recession fears hit world markets

Powell reiterated that the Fed was still hoping for a smooth landing, while acknowledging that it would be difficult. “This has become more difficult with the events of the past few months, particularly the war that has led to higher gas prices,” he told the House of Representatives committee.

The article is in Arabic

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