Fed wants to see US growth 'moving down'
The US central bank wants to see economic growth slowing and "clear" evidence of inflation decelerating before it pulls back on its efforts to tamp the brakes on the economy, Federal Reserve Chair Jerome Powell said on Tuesday. The Fed earlier this month announced the biggest interest rate increase since 2000 as it combats the highest US inflation in four decades, and Powell said policymakers agree another aggressive increase is "on the table" in June and July. "What we need is to see... growth moving down from the very high levels that we saw last year, moving down to a level that's still positive" but allows supply to catch up with demand, Powell said at an event with The Wall Street Journal. Central bankers need to see "clear and convincing evidence that inflation pressures are abating and inflation is coming down. And if we don't see that, then we'll have to consider moving more aggressively," he said. But with the economy buffeted by ongoing supply chain issues, the impact on prices and commodities from the war in Ukraine, and an unexpected labour shortage, Powell said the decision on whether to slow rate hikes is "going to be a judgment call". The Fed chief, who was recently confirmed for a second term at the helm of US monetary policy, has said the process could involve some pain but that officials hope to achieve a "soft landing," slowing price pressures without tipping the economy into a recession. But he agreed that some landings are "just a little bumpy". (AFP)