Simon Ng Jerome Powell, the Chairman of the Federal Reserve (the U.S.’s central bank) said that interest rates will not be lowered this year because inflation is still too high and there are still a lot of jobs available. He also mentioned that financial conditions have gotten tougher than normal, but it’s harder to measure how much they’ve actually changed.
Fed Chair on Interest Rates
The Federal Reserve Chairman Jerome Powell said on Wednesday that the Fed will not be reducing interest rates this year. This came after the members of the Federal Open Market Committee voted to raise interest rates by 25 points. When asked what situation would mean they change their minds and reduce rates, he said that it is not in their plan right now.
The Fed chairman said that prices are still too high and there aren’t enough people to fill all the jobs. He wants to make sure those prices come down and reach the goal of 2%. Then he was asked about what he thought about some big banks failing recently, which he answered.
Federal Reserve Chairman Jerome Powell said that it could be harder to get a loan than what the regular financial indexes might suggest. He added that these numbers are often focused on rates and stocks, but they do not always tell the full story about lending conditions. To understand this better, we need to look at other measurements like how banks are providing loans.
The Fed chair said that they will look at how serious this situation is, and if it lasts long enough, it might have a very big impact on the economy. He also reassured us that our banking system is safe and secure with plenty of capital and money.
Do you know if the Federal Government will reduce interest rates this year? Share your thoughts in the comment section.
