Fed chief believes moderate rate hikes still appropriate
Federal reserve chief jerome powell has held out the prospect of a continuation of moderate interest rate increases in the U.S. At the traditional meeting of note bankers in jackson hole (state of wyoming), he emphasized that he believed this was the right course to take.
Powell was also responding to criticism from the weiben haus. U.S. President donald trump had stated several times that he could not understand the federal reserve’s interest rate increases. Trump fears that the boom in the US economy, which was also caused by tax stimuli, could be stalled.
There are currently no signs of "an elevated risk of overheating," powell said, adding, "that’s good news."Inflation has reached the two percent target range, but there is no clear evidence to suggest that the pace of price increases is accelerating.
The leading central banker gave the U.S. Economy a good report card. "The economy is strong. Inflation is close to our two percent target and most people looking for a job are finding one," powell said. The central bank will do everything it can to maintain a strong labor market and moderate price increases.
"My colleagues and i believe that this gradual process of normalization remains the appropriate one," powell said. Income and labor market remain strong. The u.S. Central bank, still under the leadership of powell’s predecessor janet yellen, had begun in 2015 to gradually push up the prime rate. Previously, there had been no interest rate hikes for almost ten years. After the financial crisis in 2008, the central bank pursued a virtually zero-interest policy.
The annual meeting in jackson hole is considered one of the most important informal events in the international notebanking scene. The president of the european central bank, mario draghi, did not show up this year.
