Federal Reserve Chair Jerome Powell said the U.S. economy, while otherwise strong, has not seen inflation come back to the central bank’s goal.
Speaking to a policy forum focused on U.S.-Canada economic relations, Powell said that while inflation continues to make its way lower, the current state of policy should remain intact.
“More recent data shows solid growth and continued strength in the labor market, but also a lack of further progress so far this year on returning to our 2% inflation goal,” the Fed chief said during a panel talk.
Echoing recent statements by central bank officials, Powell indicated that the current level of policy likely will stay in place until inflation gets closer to target.
Since July 2023, the Fed has kept its benchmark interest rate in a target range between 5.25%-5.5%, the highest in 23 years. That was the result of 11 consecutive rate hikes that began in March 2022.
“The recent data have clearly not given us greater confidence, and instead indicate that it’s likely to take longer than expected to achieve that confidence,” he said. “That said, we think policy is well positioned to handle the risks that we face.”
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