Powell: The Fed will continue to push until inflation subsides

LAST UPDATE 22:00

Federal Reserve Chairman Jerome Powell said today that no one should question the US Federal Reserve’s determination to reduce inflation from the highest levels in decades, and that this could include raising interest rates to restrictive levels if need.

“What we need to see is inflation go down in a clear and convincing way and we will continue to push until we see it,” the Fed governor told a Wall Street Journal event, according to Bloomberg.

“If this involves moving beyond the broadly understood levels of neutrality, we will not hesitate to do so,” he added.

The central bank has already raised interest rates by 75 basis points in the last two sessions [25 μ.β. και άλλες 50 μ.β.] while it has announced two other increases by 50 bp. each time for the next two meetings in June and July.

The Fed governor confirmed these forecasts today, noting that “if the performance of the economy is what we expect, then this is something that will be on the table.”

Consumer prices rose 8.3% in April, according to data released recently by the US Department of Labor. This was slightly lower than the annual growth of 8.5% in March, which was the highest level in the last 40 years.

“The US economy is strong and we think it is in a good position to withstand a less accommodative monetary policy,” Powell said.

He even noted that “there are several different routes to have a … somewhat smooth landing”. As he explained this will be a bit like a slightly abrupt descent of an airplane, something that is certainly experienced by those who travel frequently.

The central banker, however, warned that “there may be some pain” for the Americans, as the Fed will implement its policy to reduce inflation.