US inflation is not expected to return to the Federal Reserve's long-term target of 2% for another two years at least, Jerome Powell, chairman at the central bank, said Wednesday
WASHINGTON (Pakistan Point News / Sputnik - 27th July, 2023) US inflation is not expected to return to the Federal Reserve's long-term target of 2% for another two years at least, Jerome Powell, chairman at the central bank, said Wednesday.
"We don't see ourselves getting at two percent inflation ... until 2025," Powell told a news conference after chairing the Fed's policy-meeting for July. He added that he did not envisage interest rate cuts either for at least another year.
The Fed announced on Wednesday a 25-basis point hike to interest rates, resuming the monetary tightening it began 18 months ago, after a pause in June.
Inflation, as measured by the US Consumer Price Index, was at 3% in June. It hit a four-decade high of 9.1% per annum in June 2022 in the aftermath of the coronavirus pandemic and the trillions of dollars of relief spending for that.
The Fed responded by raising interest rates aggressively, adding a total of 5% in 10 installments to the prior rate of 0.25%.
