Fed Chairman Jerome Powell stated that they may increase interest rates in September, according to inflation and labor data. However, he stated that they will carefully evaluate their decisions and that they can also leave the interest rates fixed.
Emphasizing that price stability is important to achieve strong labor market conditions, Powell stated that they continue their determination to bring inflation back to the 2 percent target. Powell stated that the Federal Open Market Committee (FOMC) has tightened monetary policy significantly since its inception, but the effects of this tightening have not been fully felt yet.
Stating that they will determine what future policy tightening will be based on data, Powell pointed out that economic activity is expanding at a moderate pace. Stating that the labor market is still tight and there is a better balance between supply and demand, Powell said that inflation is above the long-term target of 2 percent, but they need to be patient and determined to reach the target. He stated that he would not expect inflation to fall to 2 percent by 2025 and that core inflation is still quite high.
