In the midst of the vertiginous inflation that hits the country, Federal Reserve (Fed) Governor Philip Jefferson said that the central bank’s efforts remain focused on combating the rise; however, he warned that the fight to cool consumer prices will take some time.
In his first speech in Atlanta since joining the US central bank as governor in May, Jefferson said work will continue to seek to curb inflation, which in August reached 8.3% year-on-year to make it reach the proposed objective.
“We have acted boldly to address rising inflation and we are committed to taking any additional steps necessary. My colleagues and I are determined to reduce inflation to 2%.” He said.
In the meeting of September 21, the Federal Reserve confirmed a new increase of 0.75% in its base interest rate, with which the base rate rose in a range of 3%-3.25%. The increase is preceded by two other equal increases announced in July and June. The Fed said large hikes were on the way.
Jefferson said that inflation in the country is high and that this is the problem that worries him the most. “Restoring price stability may take some time and will likely involve a period of below-trend growth,” he said.
The Fed’s monetary adjustments along with the cut in unemployment projections and estimates of below-trend growth have been interpreted by specialists as signs that a recession is looming.
Although Fed officials have not explicitly projected this scenario, the chances of a soft landing diminish as interest rate increases sharpen.
Recent government data released last week shows that the personal consumption expenditures index, one of the Fed’s pet indicators, accelerated more than expected in August, suggesting that underlying inflationary pressures remain strong.
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