(TheConservativeTimes.org) – While the administration of President Joe Biden is quick to reassure the public that inflation in the country is trending down, officials from the Federal Reserve are also hesitant to declare the inflation crisis over.
Federal Reserve Chair Jerome Powell said that the Fed “will not hesitate” to further increase interest rates in an effort to reduce inflation, which has plagued Americans with inordinate increases in the prices for everyday commodities, such as gas and food.
Interest rates set by the Federal Reserve are already historically high, standing at 5.25% to 5.5%. The rates are the highest the country has seen in the last 22 years. A rapid rise in inflation prompted the Fed to keep implementing its rate hikes at the same pace; just in March last year, interest rates were close to zero.
While the latest Fed meeting did not result in another interest rate hike, Powell did not discount the possibility of more hikes in the future, given the fact that the Fed is “not confident” that the current rates are or will be sufficient to keep inflation at bay. In fact, it is entirely possible that the Fed may up interest rates at least once before the year ends.
Nevertheless, Powell also said that the U.S. central bank does not see any “urgent need” to raise rates at this time. He stressed that the Fed continues to “move carefully” in terms of looking at its actions on interest rates – while upping rates help keep inflation down, increasing them too much could also cripple the economy just as badly or even worse.
The Fed puts inflation at around 3.4% currently, compared to a high of as much as more than 7% last year. Still, the central bank still has a-ways to go to cut down inflation to its target of 2%.
Powell’s cautious approach was echoed by his colleagues. St. Louis Fed President Kathleen O’Neill Paese said that it would be “unwise” to totally discount the possibility of further rate hikes, while Richmond Fed President Thomas Barkin said that at the very least, it “remains to be seen” if more rate tightening measures are needed.
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