In Jackson Hole, Jerome Powell has just reaffirmed his will to fight firmly against inflation, towards the objective, maintained, of 2%. The Fed’s policy will therefore remain restrictive for a while and the September decision will depend on the next figures to be published.
Jerome Powell at the Jackson Hole Symposium, August 26, 2022 | Photo credit: CNBC
Those hoping for a more accommodating tone from the Jerome Powell were disappointed. As part of his speech at the Jackson Hole symposium, the President of the Fed remained firm in his desire to fight against inflation, towards a target maintained at 2%. Some thought that this level could be increased, which would have led to a less restrictive monetary policy from the central bank. She will remain.
As for the next monetary policy decision, the magnitude of the rate hike will depend on the next figures to be published. We think of employment next Friday, then consumer prices for the month of August.
” Restoring price stability will take time and requires vigorous use of our tools to better balance supply and demandsaid Jerome Powell. But our responsibility to ensure price stability is unconditional. »
” At one point “
” Although the latest economic data is mixed, in my view, our economy continues to show strong underlying momentum. The labor market is particularly strong, but it is clearly unbalanced, with the demand for labor far exceeding the available supply. The rise in prices is well over 2% and high inflation has continued to spread through the economy. So the figures for the month of July [ont été plus favorables]the single-month improvement is well below what the committee will need to consider before we are confident that inflation is easing “, explained the boss of the Fed.
As for the decision of the month of September, it “ will depend on the totality of incoming data and the evolution of the outlook (…) At some point, as the monetary policy stance tightens further, it will likely become appropriate to slow the pace of rate hikes “, he confirmed.