Federal Reserve Chairman Jerome Powell reiterated his commitment to reducing inflation, saying on Tuesday he would support raising interest rates until prices return to healthy levels.
“We would not hesitate to do so if it involved a fairly broad understanding of the past,” the central bank leader told the Wall Street Journal in a live-streamed interview. “We will leave until we feel that we are in a place where we can say that the financial situation is in the right place, we can see that inflation is declining.
He added, “We will get to that point. There will be no hesitation.”
Earlier this month, the Fed raised the benchmark borrowing rate by half a percentage point, the second increase in 2022 as inflation continues to a 40-year high.
Powell said a similar 50 basis point move after the hike could come at the next meeting as long as the economic situation remains as it is now.
On Tuesday, he reiterated his commitment to get inflation close to the Fed’s 2% target, warning that it may not be easy and that 3.6% could come at the expense of unemployment, the lowest level since the late 1960s.
“If unemployment can rise a few ticks, you will still have a strong labor market,” he said. “I would say that there are many reasonable ways to stay soft, as I said soft landings. Our job is not to hinder adversity, but to try to achieve it.”
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