Fed says more powerful measures possible to stabilize inflation

Central bankers may be forced to take stronger action to stabilize inflation expectations, Vice Chair of the US Federal Reserve Philip Jefferson said, Report informs.

He noted that the uncertainty of many economic parameters that arose during the pandemic, and especially the uncertainty of inflation prospects, remains unusually high.

One of the issues that interests central bankers is the sustainability of inflation, Jefferson said.

Combating high inflation, the Fed raised its key rate by 5.25 percentage points over a year and a half, to the current range of 5.25-5.50% reached in July.

From last summer’s 40-year highs, inflation measured using the central bank’s preferred methodology has slowed to about 3.4%.

This week, the results of a survey conducted by the New York Federal Reserve came out, which indicated a weakening of inflation expectations.

US Federal Reserve Chairman Jerome Powell does not rule out further rate hikes if inflation stops moving toward the central bank’s 2% target.