Powell: Fed still hasn’t decided on next adjustment – 05/19/2023 – Market

Federal Reserve Chair Jerome Powell said this Friday (12) that the path to follow for monetary policy in the United States has become less clear after little more than a year of aggressive increases in the basic interest rate with the objective of containing inflation.

“The risks of doing too much or too little become more balanced and our monetary policy has adjusted to reflect that,” Powell told a research conference at his bank.

He added that “we haven’t made any decision on the extent to which monetary policy tightening will be appropriate.”

Powell also said that the aftereffects of the recent banking sector woes have taken some pressure off the US central bank to raise interest rates.

Tighter credit conditions mean “our benchmark interest rate may not need to rise as much as it would to meet our targets,” he said.

He spoke as the end of the Fed’s rate-raising cycle nears the end, with markets and policymakers debating whether more rate hikes are needed to reduce inflation.