The goal of two percent inflation remains intact
From the point of view of its boss Jerome Powell, the US Federal Reserve could take more than three years to reach its inflation targets. “We're just being honest about this challenge,” Powell said in a hearing before the US House of Representatives Financial Services Committee on Wednesday. The Federal Reserve had promised not to raise interest rates until the rate of inflation exceeded two percent.
The Fed chairman nevertheless expressed confidence that the Fed will reach its target. “We think we can do this, we think we will. It could be more than three years,” he said.
The hearing, which this time took place virtually because of the pandemic, is the second day of questioning by the US Congress. On Tuesday, Powell was already on video to answer questions from the US Senate Banking Committee. The central bank governor had given his assessment that the US economy would be dependent on help from the monetary authorities for a long time in view of the virus crisis. The Fed will continue its bond purchases at at least the current rate until it sees significant progress towards its goals. The US Federal Reserve is currently helping the US economy with, among other things, ultra-low interest rates and monthly securities purchases worth $ 120 billion.
Powell's prospects for another term of office should also depend on the two-day hearing. His four-year term of office will expire early next year.
