Powell's Stance on Monetary Policy

In a recent address to the Senate Banking Committee, Federal Reserve Chair Jerome Powell emphasized the central bank's cautious approach towards adjusting its monetary policy. Powell reiterated that the Federal Open Market Committee (FOMC) is in no rush to make changes, stating, "In considering the extent and timing of additional adjustments to the target range for the federal funds rate, the FOMC will assess incoming data, the evolving outlook, and the balance of risks."

Current Policy and Future Adjustments

Powell highlighted that the current policy is "well-positioned" to navigate through the existing risks and uncertainties. He further explained that should inflation not sustainably reach the 2% target while the economy remains robust, the Fed could "maintain policy restraint for longer." Conversely, if the labor market unexpectedly weakens or inflation drops faster than expected, Powell assured that the Fed would "ease policy accordingly."