Follow-up – aware
Federal Reserve Chairman Jerome Powell expressed concern on Tuesday that keeping interest rates too high for too long could put economic growth at risk.
In preparation for a two-day appearance in the US Congress this week, Powell said that “the economy remains strong as does the labor market, despite some recent slowdown.”
Powell pointed to some moderation in inflation, saying that “policymakers remain determined to bring inflation down to their 2 percent goal.”
“At the same time, given the progress we have made in reducing inflation and cooling the labor market over the past two years, high inflation is not the only risk we face,” he said in prepared remarks.
He pointed out that easing political restrictions too late or too little could unduly weaken economic activity and employment.
The comment coincides with the approaching one-year anniversary of the last time the Federal Open Market Committee raised benchmark interest rates.
The Fed’s overnight lending rate is currently between 5.25% and 5.5%, the highest level in about 23 years, the result of 11 consecutive hikes after inflation reached its highest level since the early 1980s.
