US Federal Reserve (Fed) Chairman Jerome Powell has said that further hikes may be unnecessary from a tightening of credit conditions prompted by recent financial stresses due to the collapse of Silicon Valley Bank (SVB) and Signature Bank. ,
Powell said in a statement, “Although financial stability instruments have helped calm the banking sector, the events that have occurred have led to a tightening of credit conditions, which has a negative impact on economic growth, hiring, and inflation.” likely to reduce.” Lecture in memory of former Fed economist Thomas Laubach this Friday.
“As a result, there may not be a need to raise rates as high as it would otherwise be to meet our targets,” he said. However, Powell cautioned that there is still “high uncertainty” in this regard.
The Federal Open Market Committee (FOMC) of the United States Federal Reserve (Fed) already unanimously decided on May 3 to approve an increase in interest rates by 25 basis points, to keep them within a target range of between 5% and 5.25%. Can be kept on
Unlike the previous 25 basis point hike announced on March 22, the Fed did not mention at the time that more interest rate hikes were necessary to moderate price increases and bring inflation back to around 2%. In such a situation, it was being speculated that there could be some hindrance in the growth.
In any case, the next possible revision of this figure will be announced on June 14, when Fed officials will meet again and weigh the risks of continuing with its monetary tightening policy following the volatility unleashed by the bankruptcy. SVB’s and which is vested for the time being following the troubled First Republic Bank’s takeover by JP Morgan.