The chairman of the Federal Reserve, Jerome Powell, today reiterated his determination to face the highest inflation in 40 years, and said that the determination shown by the US Federal Reserve encourages the whole world to trade with the US dollar.
“My colleagues and I are focusing solely on getting inflation back to its official 2% target,” Powell told a Fed conference in Washington on the international role of the dollar.
“The Federal Reserve’s strong commitment to our mission of price stability contributes to the broader confidence that the dollar enjoys as a means of storing value,” he added.
These are the first statements of the central banker from the last increase of interest rates by the Fed, last Wednesday, by 75 basis points, to the largest increase of US interest rates since 1994.
The Fed chairman also said today that the central bank’s ability to meet its dual goal of maximum employment and price stability also depends on maintaining financial stability.
“The Fed’s commitment to our dual goal and financial stability encourages the international community to hold on and use the US dollar,” he said.
He also highlighted the role of central bank swap lines and repo facilities that facilitate foreign central banks to access dollars in times of high volatility. “Both facilities strengthen the position of the dollar as the dominant world currency,” he said.
Source: Capital
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