Will continue to aggressively fight inflation, says Fed Governor ahead of policy meet
Vienna [Austria] September 11 (ANI): US Federal Reserve Governor Christopher J. Waller said the decision at the next monetary policy meeting will be "straightforward" and the central bank will continue to aggressively fight inflation.
ANI
Sep 11, 2022 14:29 IST
Vienna [Austria] September 11 (ANI): US Federal Reserve Governor Christopher J. Waller said the decision at the next monetary policy meeting will be "straightforward" and the central bank will continue to aggressively fight inflation.
By saying so, the central bank Governor cleared the air that another interest rate hike is imminent.
The two-day monetary policy meeting in the US will start on September 20.
"Because of the strong labour market, right now there is no tradeoff between the Fed's employment and inflation objectives, so we will continue to aggressively fight inflation," the Governor said while addressing the 17th Annual Vienna Macroeconomics Workshop (2022).
The governor expects it will take some time before inflation moves back to the 2 per cent goal, and that the monetary policy committee will be tightening policy into 2023.
"But the answers to questions of "how high?" and "for how long?" will depend solely on incoming data," the Governor said.
Meanwhile, the US economy has been going through a rough patch with high inflation and negative growth.
For the record, consumer inflation or Consumer Price Index in the US was at 8.5 per cent in July compared to a year ago, data showed. The inflation print for the month was down from a four-decade high of 9.1 per cent in June.
In the backdrop of an over four-decade high inflation in the country, the US Federal Open Market Committee had in its latest meeting raised the key policy interest rate by 75 basis points to 2.25-2.50 per cent, anticipating that the increase in the interest rates will be "appropriate".
Hiking interest rates typically cool demand in the economy, thereby putting a brake on the inflation rate.
The US Federal Reserve in its June meeting too raised the interest rate by 75 basis points, which was then the steepest hike since 1994.
Meanwhile, real gross domestic product (GDP) in the US marked the second consecutive quarter of degrowth, which qualifies for a technical recession. A technical recession is often defined in which there have been two consecutive quarters of negative growth in the real GDP.
On recession in the US, Governor Waller said: "...I think the argument that we entered a recession in the first half of 2022 has pretty much ended--we didn't."
The Governor further said data suggest an uptick in consumption in the third quarter - July-September.
Echoing along the same line with Governor Waller's view, Vice-Chair of the US central bank, Lael Brainard, said monetary policies need to be restrictive for "some time" to provide confidence that inflation moves down towards the target.
"We are in this for as long as it takes to get inflation down. So far, we have expeditiously raised the policy rate to the peak of the previous cycle, and the policy rate will need to rise further," Brainard said on Wednesday at the Clearing House and Bank Policy Institute 2022 Annual Conference. (ANI)
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