Federal Reserve officials are “gratified” with the progress made so far on bringing down inflation, but are not yet confident that interest rates are high enough to bring inflation down to 2% target over time, Fed Chairman Jerome Powell said Thursday. “We know that ongoing progress toward our 2% goal is not assured: Inflation has given us a few head fakes,” Powell said, in remarks on a panel at the International Monetary Fund.
Powell said the Fed “will not hesitate” to raise interest rates again if it becomes appropriate. At the same time, the Fed will be cautious in its future decisions, he said. “We will continue to move carefully, however, allowing us to address both the risk of being misled by a few good months of data, and the risk of overtightening,” Powell said. Because of the strong GDP growth in the third quarter, the Fed is attentive to the risk that stronger economic growth could undermine the progress on inflation, the Fed chairman said. In addition, the battle against inflation may get harder, Powell suggested, as most supply-chain bottlenecks have disappeared. “While the broader sup …
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