Federal Reserve Chair Jerome Powell use an appearance at the Economic Club of New York Thursday to say a slower-growing economy and job market might be necessary to slow the high inflation rate.
While noting that inflation has cooled significantly from a year ago, Powell cautioned that it’s not yet clear whether inflation is on a clear path back to the Fed’s 2% target.
“A few months of good data are only the beginning of what it will take to build confidence that inflation is moving down sustainably toward our goal,” Powell said, according to The Associated Press. “We cannot yet know how long these lower readings will persist or where inflation will settle over coming quarters.”
Last month, Fed officials said they’d likely raise interest rates one more time before the end of the year. The Fed has already raised rates 11 times since March 2022. The hikes have lifted their key rate to about 5.4%, its highest level in 22 years.
Several recent economic reports have suggested that the economy is growing robustly, the AP reported, and that inflation could remain persistently elevated, which could require further Fed action.
“Additional evidence of persistently above-trend growth, or that tightness in the labor market is no longer easing,” Powell said, “could put further progress on inflation at risk and could warrant further tightening of monetary policy.”
