Fed Chairman sees evidence that inflation has already peaked in the US

During its first face-to-face press conference since the start of the pandemic, the authority stated that inflation is “too high and we understand the difficulties it is causing and we are acting expeditiously to contain it.”

The head of the Fed He stated that the United States economy has been hit in the last two years, both by covid-19 and the war in Ukraine, but that despite this, it has remained resilient. However, for the labor market remains firm we must put an end to the escalation of inflation.

As for the future, he mentioned that, given the conditions, the Federal Open Market Committee (FOMC) would consider that “increases of 50 basis points in interest rates should be on the table in the next two meetings”.

The president of the Fed assured that there is evidence that inflation would already be reaching its peak (peak) and that the expectations point to begin to see how it “flattens”. In this sense, he highlighted that “A 75 basis point increase is not something the committee is actively considering,” thereby transmitting relief to the markets.

“It’s a very difficult environment trying to give forward guidance 60 or 90 days in advance, there are so many things that can happen in the economy around the world. So we’re giving ourselves room to look at the data and make that decision when we get there.”

there will be no recession

Although several economists and market experts have pointed out that a recession over the next year, Powell was emphatic in ruling out the possibility, although he specified that with recent world events, “some slower economic activity can be seen.”

“The economy is doing pretty well, the job market is strong and wages are going up. It’s a strong economy and nothing about it suggests it’s close to or vulnerable to a recession.” accurate.

Financial Journal-RIPE