US Fed's Powell: "There Will Be Pain in Controlling Inflation... Still Continuing Rate Hikes"

[Image source=Yonhap News]

[Asia Economy New York=Special Correspondent Joselgina] "We will continue until we clearly and definitely see inflation going down." Jerome Powell, Chairman of the U.S. Federal Reserve (Fed), confirmed that he will continue raising the benchmark interest rate to ease inflation, which has surged to the highest level in over 40 years.

On the 17th (local time), Powell attended the 'Future of Everything' event hosted by The Wall Street Journal (WSJ) and stated, "There may be some pain involved in restoring price stability."

He emphasized that the central bank, the Fed, is focused on the task of price stability, saying, "We have both the means and the determination to lower inflation." He also hinted at the possibility of raising the benchmark interest rate above the neutral rate, estimated at around 2.5%, saying, "If we need to go beyond the widely recognized neutral rate level, we will not hesitate to do so."

Powell, who raised the benchmark interest rate by 0.5 percentage points earlier this month, evaluated, "If economic conditions are similar, we may discuss a 0.5 percentage point increase at the next meeting."

Additionally, Powell mentioned that he still has confidence in the so-called 'soft landing'?responding to inflation without causing a recession. However, he added, "This will be a difficult task."

Regarding the U.S. economic conditions, he referred to strong retail sales and diagnosed, "It is strong. It is in a state that can withstand a less accommodative tightening monetary policy well." He also predicted that the strong labor market will continue despite monetary tightening.