Federal Reserve Chair Jerome Powell Uncertain About Future U.S. Interest Rates Amid Complex Economic Landscape
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With concerns over the lagged effects of previous tightening and recent banking stresses, the Federal Reserve is monitoring various factors to evaluate the potential need for additional policy adjustments to bring inflation back to the target of 2%.
Inflation and Uncertainty
Federal Reserve Chair Jerome Powell expressed uncertainty on Friday regarding the need for further interest rate increases in the United States as central bank officials struggle with the complex interplay between past borrowing cost hikes, recent credit tightening, and the challenging task of controlling inflation. As a result of the stress in the banking system, the central bank may not have to raise interest rates as high as before, according to the Fed Chair.
During an interview at a Fed research conference on May 19, Powell reiterated that decisions would now be made on a meeting-by-meeting basis. Acknowledging the need to assess the consequences of previous rate hikes, Powell stated:
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