Jerome Powell during his hearing in the US Senate
by Howard Schneider
The chairman of the US central bank (Fed), Jerome Powell, said on Wednesday that he was not yet ready to declare that the fight against inflation was over.
“Our job is to make decisions, when and how to make them, based on data, changing outlooks and the balance of risks and without regard to other factors, including political factors,” Jerome Powell said during a House Financial hearing. case committee.
“We have a long tradition of doing this, even in election years. Our decisions will be well-reasoned. It’s simply not appropriate for us to think about election cycles.”
Jerome Powell and other Fed officials have indicated they will not consider further rate cuts until they see more progress toward the central bank’s 2% inflation target.
The Fed chairman said the US economy was headed for a soft landing, which would mean meeting the Fed’s inflation target without a rise in unemployment.
“There is a path to return to price stability while keeping unemployment low,” Jerome Powell said. “We are moving forward on this path and we are determined to stay there.”
The latest PCE inflation number, the US central bank’s preferred indicator, rose 2.6% year-on-year in May, indicating that price dynamics are continuing to ease.
Jerome Powell again said the Fed should cut rates again before inflation hits 2%, but by the underlying dynamics it looks like it will take it there.
The Fed chairman told the US Senate Banking Committee on Tuesday that the US economy is no longer overheating.
The next meeting of the US central bank will take place on 30-31 July.
Members of the House Finance Committee also asked Jerome Powell about his exchanges with US President Joe Biden, particularly about the latter’s cognitive abilities.
“During your discussions with the President, did you notice any decline in his mental or cognitive abilities?” asked Republican Rep. Mike Lawler.
“No,” Jerome Powell replied.
The Fed chairman indicated that his last meeting with Joe Biden was “a few months ago” and that he had only shaken hands.
(French version Camille Raynaud)
