US Federal Reserve won’t hesitate to tighten policy further if appropriate: Jerome Powell

livemint.com:

US Federal Reserve won’t hesitate to tighten policy further if appropriate, said Chair Jerome Powell on Thursday. Speaking at an International Monetary Fund (IMF) conference in Washington, Powell said: “If it becomes appropriate to tighten policy further, we will not hesitate to do so." “We will continue to move carefully, however, allowing us to address both the risk of being misled by a few good months of data, and the risk of overtightening," he added.

He also said that the inflation has come down, but remains well above 2% target. The US central bank isn’t fully confident that it has tightened enough to return inflation to 2%.

“My colleagues and I are gratified by this progress but expect that the process of getting inflation sustainably down to 2 percent has a long way to go," he said. He also said that in the future a greater share of progress in bringing down the inflation will have to come from tight monetary policy.

“Going forward, it may be that a greater share of the progress in reducing inflation will have to come from tight monetary policy restraining the growth of aggregate demand." “The Federal Open Market Committee is committed to achieving a stance of monetary policy that is sufficiently restrictive to bring inflation down to 2 percent over time; we are not confident that we have achieved such a stance," Powell said in his speech. Powell also said that the Federal Reserve expect GDP (gross domestic product) growth to be moderate in coming quarters, but it remains to be seen.

Last week, the US central bank’s Federal Open Market Committee (FOMC) left policy rates unchanged at 5.25% to 5.5% range, the highest level in 22 years. The US Federal Reserve has repeatedly raised interest rates over the past