Federal Reserve Chairman Jerome Powell participated in a panel on monetary policy challenges in the global economy at the International Monetary Fund's annual research conference.
The panel was expected to have a moderated Q&A.
Powell announced that the FED will begin its next framework review in the second half of 2024. He emphasized that the FED will continue to act carefully and make decisions meeting by meeting.
While pleased with the progress made on inflation, Powell stated that there is still a long way to go. Powell expressed concerns about reaching the 2% inflation target and said he was not sure the FED had achieved such a target. He also mentioned that inflation has caused them a few confusions.
Powell assured that the Fed would not hesitate to tighten further if appropriate. They also said they were wary of the risk that stronger growth could undermine progress in inflation, necessitating a monetary policy response.
On the economic front, Powell expects GDP growth to moderate in coming quarters. He also explained that the labor market remains tight but is moving towards better balance.
Short-term US interest rate futures prices fell following Powell's remarks at the IMF.
The event was disrupted by the arrival of climate protesters, leading Powell to leave the stage.
Powell's statements after the break were as follows:
It is difficult to draw a direct link from situations such as high bond yields to the monetary policy response.
The Fed won't rule out significant bond tightening, but it doesn't have to make a decision now.
We're taking a careful look at the reasons behind the recent rise in bond yields.
The Fed is still trying to decide whether it needs to do more, and then we'll consider how long it can keep rates high.
The biggest mistake is not keeping interest rates high enough.
*This is not investment advice.
