FED Chairman Jerome Powell is speaking at a hearing of the Senate Finance, Housing and Urban Affairs Committee, here are the highlights from his speech:
- Long-term inflation expectations appear robust.
- The FED’s framework review will not focus on the inflation target and the inflation target will remain at 2%.
- Existing policies are fully prepared to deal with risks and uncertainties.
- If the economy remains strong and inflation does not approach 2%, policy could be maintained cautiously for an extended period. If the labor market weakens unexpectedly or inflation falls more than expected, policy could be eased modestly.
- Overall, the US economy is strong and the inflation rate is close to the 2% target, but we are still a bit high.
- The unemployment rate remains low and stable, the labor market is strong and has not become a source of inflationary pressure.
*This is not investment advice.