Aug 25, 2023

In his opening remarks for the Kansas City Fed’s Jackson Hole Economic Policy Symposium, Federal Reserve Chair Jerome Powell addresses the current state of inflation and why the central bank is "prepared to raise rates further if appropriate" in order to bring inflation down.

Video transcript

It is the fed's job to bring inflation down to our 2% goal. And we will do so. We have tightened policies significantly over the past year. Although inflation has moved down from its peak. A welcome development, it remains too high. We are prepared to raise rates further if appropriate and intend to hold policy at a restrictive level until we are confident that inflation is moving sustainably down toward our objective. Today, I will review our progress so far and discuss the outlook and the uncertainties we face as we pursue our dual mandate goals. I will conclude with a summary of what this means for policy. Given how far we have come at upcoming meetings. We are in a position to proceed carefully as we assess the incoming data and the evolving outlook and risks. The ongoing episode of high inflation initially emerged from a collision between very strong demand and pandemic constrained supply. By the time the F MC raised the policy rate in March 2022 it was clear that bringing down inflation would depend on both the unwinding of the unprecedented pandemic related demand and supply distortions and on our tightening of monetary policy which would slow the growth of aggregate demand, allowing supply time to catch up while these two forces are now working together to bring down inflation. The process still has a long way to go even with the more favorable recent readings.

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