US Fed to continue gradual rate hikes to manage potential risks

Source:Xinhua Published: 2018/8/25 6:48:27

US Federal Reserve Chair Jerome Powell reiterated on Friday that the central bank will stick to the strategy of gradual rate hikes to manage potential risks and support domestic economic recovery.

Speaking at an annual economic symposium in Jackson Hole, Wyoming, Powell said the central bank faces two major risks: "moving too fast and needlessly shortening the expansion, versus moving too slowly and risking a destabilizing overheating."

"I see the current path of gradually raising interest rates as the FOMC's approach to taking seriously both of these risks," he said, referring to the Federal Open Market Committee (FOMC), the Fed's policy-making committee.

While US inflation has recently moved up near 2 percent, Powell said he sees "no clear sign of an acceleration above 2 percent" and there does not seem to be "an elevated risk of overheating."

"This is good news, and we believe that this good news results in part from the ongoing normalization process, which has moved the stance of policy gradually closer to the FOMC's rough assessment of neutral as the expansion has continued," he said.

Posted in: ECONOMY

blog comments powered by Disqus