Federal Reserve Chair outlines Fed's strategy for managing inflation, economic growth
Date
10/1/2024 8:25:28 AM
(MENAFN) In a recent address at the National Association for Business Economics Annual Meeting in Tennessee, Federal Reserve Chair Jerome Powell outlined the Fed's strategy for managing inflation and economic growth. He emphasized that while the Fed plans to utilize its monetary tools to bring inflation down to targeted levels, it anticipates a gradual shift toward a more neutral policy stance if economic conditions evolve as expected.
Powell highlighted that the US Economy has demonstrated resilience and made substantial progress in achieving the Fed's dual mandates of maximum employment and stable prices over the past two years. He noted that labor market conditions have remained robust, albeit cooling from their previously heated levels, and inflation appears to be on a sustainable path towards the Fed's 2 percent target.
The Fed's recent decision to lower the target range for the federal funds rate by 0.5 percentage points reflects a growing confidence in the ability to maintain labor market strength while fostering moderate economic growth and steering inflation downwards. This adjustment comes after the Fed's policy rate had reached a two-decade high in July 2023, at a time when core inflation was exceeding 4 percent and unemployment remained exceptionally low at 3.5 percent.
Powell stressed the importance of a balanced approach in policy-making, indicating that decisions will continue to be made on a meeting-by-meeting basis, taking into account incoming data and the evolving economic outlook. He reiterated that the risks associated with monetary policy are two-sided, which requires careful assessment as the Fed navigates its path forward. As the economic landscape changes, the Fed aims to recalibrate its stance to ensure sustained growth and price stability, marking a pivotal moment in its policy trajectory.
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