Fed Chair Powell: Inflation 'too high,' committed to stability

U.S. Federal Reserve Chair Jerome Powell declared that inflation is "too high" and reiterated the central bank's unwavering commitment to achieving price stability.

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We all look around and see that inflation is too high.

Speaking at the European Central Bank's annual policy forum in Portugal, Powell stated, "We all look around and see that inflation is too high." He affirmed that he is not alone on the stage in vowing to achieve price stability. He stressed that the Federal Open Market Committee (FOMC) is dedicated to bringing down inflation in the United States, fulfilling the Fed's promise.

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We are going to achieve price stability in the United States. That is what the Fed is committed to doing.

Powell cautioned that anyone expecting the Fed to tolerate inflation above its 2% target would be disappointed. He explicitly reaffirmed the 2% inflation target, signaling that the central bank's efforts will continue until this goal is met. This stance aims to anchor inflation expectations and maintain credibility in the Fed's commitment to price control.

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If anyone on this stage thinks that the Fed is going to be complacent and allow inflation to run above our 2% target, they are going to be disappointed.

Looking ahead, Powell indicated that the decision on whether to raise interest rates would be made at the upcoming meeting, providing a clear signal about the future path of monetary policy. This forward guidance suggests that further rate hikes remain on the table as the Fed continues its battle against elevated inflation.

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We will be deciding on rate increases when we go into the meeting with a closed door.