FED Chair Jerome Powell Talks Continued Inflation Struggle, Says “Banking System Is Safe”

FED Chair Jerome Powell Talks Continued Inflation Struggle, Says “Banking System Is Safe”

Following the crucial decision of the Federal Reserve to raise interest rates by another 25 basis points, Fed Chairman Jerome Powell spoke of the current inflation struggle and assures that “the banking system is safe”, in subsequent statements.

In particular, Powell noted that the “process of getting inflation down has a long way to go, it’s going to be bumpy.” Conversely, the interest rate decision comes amid a burgeoning banking crisis, following the collapse of Silicon Valley Bank just weeks ago.

Powell tackles interest rate decision

All eyes were on the direction the Federal Reserve would take to close today’s pivotal meeting. In addition, many wondered if the Fed would consider their consistent rate hikes amid the looming crisis in the banking sector.

Now, following the decision to raise rates another 25 basis points, Fed Chairman Jerome Powell discussed the inflation battle while assuring that “the banking system is safe.” Conversely, the sentiment comes after two of the biggest bank failures since the 2008 financial crisis.

FED Chairman Jerome Powell says there is a need for
Source: TIME

Powell stated that “Inflation remains well above our long-term target of 2%.” In addition, he stated, “Inflation has moderated somewhat since the middle of last year, but the strength of these recent readings indicates that inflationary pressures remain elevated.”

In addition, Powell stated, “The process of bringing inflation back to 2% has a long way to go and is likely to be bumpy.” Alternatively, Powell spoke of the commission’s confidence in relation to stress in the banking sector. To declare, “I think our view is that the banking system is healthy and resilient. It has strong capital and liquidity.”

In conclusion, Powell was asked whether or not the Fed was considering a pause in rate hikes. Afterward, Powell assured it was considered, but deviated from following “the meeting data on inflation and the labor market came out stronger than expected.” Powell noted, “prior to recent events, we were clearly on track to continue with ongoing rate hikes.”