Jerome Powell considers it premature to speculate on monetary easing

(Boursier.com) — Jerome Powell, President of the Fed, speaking this Friday at a conference in Atlanta, indicated that it was still premature to assert that monetary policy was sufficiently restrictive. He said the US central bank could raise rates further if appropriate. It would also be premature to try to speculate on the timing of a possible relaxation of the bank’s policy, according to Powell, who nevertheless notes significant progress, “considerable” even, in terms of reducing inflation. The Fed’s helmsman believes that we still need to get closer to the 2% inflation target…

Wall Street remains hesitant following these comments, which let’s admit it do not provide any real new information. Powell finds that monetary policy is well in restrictive territory, but to meet the inflation target, recent progress must continue. Inflation has calmed, observes the leader, but underlying inflation remains too high. “We need to see more progress on bringing inflation down towards 2%,” Powell insists. It also notes that uncertainty over the economic outlook is “unusually high.” The FOMC, the Fed’s Monetary Policy Committee, is therefore proceeding cautiously in its approach, while the risks of “under” and “over” monetary tightening become more balanced.