Fed Chairman Jerome Powell attended today’s Jackson Hole conference and shared important information about the Fed’s policies. Talking about the central bank’s future plans and inflation expectations, Powell; He said that the Fed could try to increase the inflation rate if needed.
The Fed injected $ 3 trillion into the economy this year to largely combat the coronavirus. Most economists think this will result in increased inflation rates and that the American economy will be heavily affected.
Fed Chairman Jerome Powell attended the Jackson Hole conference today and explained what the Fed’s monetary policy is pursuing. Addressing experts’ concerns over inflation, Powell; He also shared the inflation expectations of the central bank and what kind of policy it will follow.
They Can Intentionally Increase Inflation
Jerome Powell, who attended the long-awaited Jackson Hole conference, discussed the issue of inflation, which has caused great controversy in the past few months. Describing the Fed’s current policies, Powell; announced that they have an average inflation target of 2% as a central bank. Powell also explained that this is an average number.
Stating that they are trying to keep the inflation rate at an average level of 2%, Powell stated that they will allow the inflation rate to rise if needed. Emphasizing that the desired average inflation target will not be achieved if the inflation rate remains below 2% over the years, Powell said that this is why the inflation rate should rise above 2% from time to time.
Policy Change Every Five Years
Jerome Powell said that the Fed reviews its long-term plans every five years and acts accordingly. Stating that they will implement their policies more transparently as a central bank, Powell stated that this transparency is also reflected in inflation expectations.
It will take time for the economy to recover
Jerome Powell said that the American economy experienced a historical contraction in the last quarter and that this was due to Kovid-19. But Powell recalled that the American economy made a good impression earlier this year and the economy was healthy before the Coronavirus.
Stating that the American economy will start to recover over time, Powell said; He stated that some industries, such as the entertainment industry, may take a little longer to recover. Stating that millions of people working in these sectors may have difficulties in finding jobs, Powell gave the message that they will try to support these people as the Fed.