Fight against inflation: the head of the central bank now chooses clear words - "Don't stop until we reach our goal"

Created: 08/26/2022, 16:59

By: Hannes Niemeyer

Jerome Powell, Chief of the US Federal Reserve.

© Manuel Balce Ceneta / dpa

At a conference, US Federal Reserve Chairman Jerome Powell made statements that were not only surprisingly clear, but also point to another interest rate hike in the fight against inflation.

Jackson Hole – US Federal Reserve Chairman Jerome Powell has made it clear that the central bank will continue to take decisive action against high inflation.

In a speech at the central bank conference in Jackson Hole, USA, Powell referred to the recent fall in inflation in the USA.

But he also made it clear that we “need to see more”.

He reiterated that the "overriding goal" of US monetary policy is to achieve the 2 percent inflation target.

Fed Chairman Powell on Fighting Inflation: "Don't Stop Until We Get There"

Powell's words were unusually clear and show that the tough course to fight inflation is apparently to be maintained.

, the head of the central bank emphasized

that price stability should be regarded as "the rock of our economy".

Such an economy “would not work for anyone without stable prices”.

In order to combat high inflation, interest rate hikes are therefore still necessary.

Companies and households are therefore facing "painful" times, which are necessary.

"We don't stop until we reach our goal," Powell pointed out clearly, according to the

.

Powell is surprisingly clear at the central bankers' conference - further rate hikes likely

Powell's statements thus point to further significant interest rate increases, which could only move prices on the foreign exchange market for a short time.

Rather, weaker than expected economic data from the USA provided a boost for the euro.

In July, consumer spending and the private incomes of US citizens hardly increased.

In addition, a price index based on consumer spending rose only 6.3 percent year-on-year.

In the previous month, the rate of increase was still 6.8 percent.

The US Federal Reserve bases its monetary policy on the PCE price indicator, which is lower than the general inflation rate of 8.5 percent in July.

For other important currencies, the ECB set the reference rates for one euro at 0.84590 (0.84293) British pounds, 137.02 (136.07) Japanese yen and 0.9642 (0.9616) Swiss francs.

A troy ounce of gold was trading at $1,749 in London this afternoon.

That was about ten dollars less than the day before.