Fed needs to be careful how it conducts policy, says Jerome Powell

(Boursier.com) – Jerome Powell speaks publicly for the second day in a row this Thursday, this time before the Senate Banking Committee. Federal Reserve boss admits war in Ukraine could hit sentiment and hurt investment spending: “It’s hard to say and the Fed will have to be nimble.” Additionally, while the impact of sanctions and war remains “highly uncertain”, the leader says there will be “upside pressure on inflation at least for some time.”

While the American labor market is robust to say the least at the start of the year, Jerome Powell reiterates the idea that the most important factor in ensuring economic expansion, and therefore strong employment growth, is mastery prices. According to him, it is thus preferable for the moment to continue the calendar of tightening of the monetary policy envisaged before the Russian offensive in Ukraine. “In this sensitive period, the Fed should be cautious in the way it conducts its policy”, underlines once again Jerome Powell.