The US Federal Reserve is prepared, if needed, to increase interest rates further in order to bring inflation down to its long-term 2% target, Fed Chair Jerome Powell has said.
"We know that ongoing progress toward our 2% goal is not assured: Inflation has given us a few head fakes," Powell told a conference in Washington.
While the Fed's rate-setting committee is"committed" to achieving a sufficiently tight stance of monetary policy,"we are not confident that we have achieved such a stance," Powell said. The strong recent economic data has increased the likelihood of a so-called"soft landing," whereby the Fed succeeds in tackling inflation without plunging the US into recession.
But not all voting members of the rate-setting Federal Open Market Committee have expressed this view. At an International Monetary Fund conference, Powell indicated the Fed would proceed cautiously,"allowing us to address both the risk of being misled by a few good months of data, and the risk of overtightening."