“It makes sense to moderate the pace of interest rate hikes.” Thus Fed Chairman Jerome Powell, in a speech at the Brookings Institution.
Powell added that the intensity of the Federal Reserve’s monetary tightening could be moderated as early as the next meeting of the FOMC (the monetary policy arm of the US central bank), scheduled for December 13 and 14.
The head of the US central bank spoke of “significant progress” that the Fed has made “in making (monetary) policy sufficiently restrictive”.
Of course, “there is still work to be done” and “there is likely to be a need to maintain the restrictive policy for some more time”, in order to fight inflation.
On the other hand, “history sends a strong warning about the risk of easing monetary policy prematurely”, explained Jerome Powell, noting that “we have a long job to do to restore price stability”.
“It will take many more tests to be sure that inflation is really coming down – said the Fed helmsman – By any standard, inflation remains too high”.