US Fed chair: Slower expansion likely end in dealing with hi...| MENAFN.COM

Thursday, 18 August 2022 10:37 GMT

US Fed chair: Slower expansion likely end in dealing with high inflation


(MENAFN) The US Federal Reserve Chair Jerome Powell stated Wednesday that slower financial expansion is a potential and likely end in dealing with high inflation.

"Since the pandemic, we've been living in a world where economy is driven by very different forces. We know that. What we don't know is whether we will be going back to something that look like what we had before," Powell said at European Central Bank Forum on Central Banking 2022 in Sintra, Portugal.

"In the meantime, we had a series of supply shocks, we've had very high inflation across the world. We're learning to deal with it," he informed the panel called "Challenges for monetary policy in a rapidly changing world."

Powell restated that the US economy is in a strong shape to handle the Fed's higher interest rates, and said that the goal of rate increases is to allow delivery side to overtake high requests.

"We hope that (economic) growth still remains positive. Households are in a very strong financial shape, they still got a lot of excess savings ... labor market is tremendously strong. Overall, the US economy is well-positioned to withstand to monetary policy," he added.

"Our aim is to have (economic) growth to moderate. It is a necessary adjustment that needs to happen, so that supply can catch up and supply chains can improve. Right now, supply and demand are really out of balance. We need to get them better in balance so that inflation can come down," he clarified.

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