The US Federal Reserve (FED) raised the policy interest rate by 50 basis points to a range of 4.24-4.50%, and FED Chairman Jerome Powell held a press conference following the decision. Recalling that they took strong steps to tighten the monetary policy stance throughout the year, Powell emphasized that the effects of their rapid tightening so far have not yet been felt and they still have a lot of work to do.
“It will take substantially more evidence to provide confidence that inflation is on a sustained downward path,” Powell said, noting that the October and November inflation data showed a welcome decline in the monthly price increases.
Powell also said, “I wouldn’t see us considering rate cuts until the committee is confident that inflation is moving down to 2% in a sustained way,” noting that it seems logical to raise rates more slowly at the next meeting since restoring price stability will likely require maintaining a more restrictive policy stance for a while.
