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The president of the Federal Reserve (Fed) Jerome Powell said that the central bank is determined to continue raising interest rates until that there is evidence that inflation is falling, given the risk of causing an economic recession in the country.
“What we need to see is that inflation comes down in a clear and convincing way. And we’re going to keep pushing until we see that ,” he said on Tuesday 17 May at a Wall Street Journal conference.
Powell, who was ratified for a second four-year term at the Fed last week, said the Fed would consider a faster rate hike if price hikes weren’t moderate.
“What we need to see is clear and convincing evidence that inflationary pressures are easing and inflation is coming down. And if we don’t see that, we’ll have to consider moving more aggressively. If we see that, we can consider moving to a slower pace”, he said.
The statements come after On Wednesday May 4, the Federal Reserve raised interest rates by 0.5% above the increase of 0.25% released last March. This movement is the biggest increase in two decades.
For its part, the rise in prices continues to wreak havoc in the country. According to the most recent report from the Bureau of Labor Statistics, inflation reached 8.3% year-on-year in April, a slight drop from the 8.5% reported in March.
Regarding inflation per month, in April there was an increase of 0.3 %, a figure lower than the jump of 1.2% in March, according to the office.
Opinions are divided on the possibility of an economic recession. While Deutsche Bank forecasts this scenario for late 2023 and early 2024, economists dismiss this happening because there are no signs that consumer spending is falling. Powell has said on several occasions that the country’s economy is very strong.
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