US Federal Reserve (Fed) President Jerome Powell said on Friday (22nd) that the supply chain dilemma and high inflation are likely to continue until next year, and the central bank will be ready to respond at any time. At the same time, it said that it will start reducing debt purchases (Taper). The time has come, but because the number of employed people is still low, there is no time to raise interest rates.
Bauer attended an online meeting held by the Bank for International Settlements and the Central Bank of South Africa on Friday and said that supply chain restrictions and inflation may last longer than originally expected, and even extend to next year, but eventually they will gradually decline as employment grows. To the 2% target level.
Although he believes that inflationary pressures will eventually ease, Bauer emphasized that the central bank will still maintain policy flexibility and offer policy tools when it perceives inflation risks to maintain price stability and achieve the goal of full employment. However, Judging from the current situation, the Fed will continue to wait and see and wait.
Several Fed officials, including Bauer, previously hinted that the Fed will announce the launch of Taper at the interest rate meeting from November 2 to 3, gradually reducing the size of its monthly debt purchases of 120 billion US dollars.
In response, Bauer said on Friday that it is time to reduce the purchase of debt (Taper), but it is not yet the time to raise interest rates.
Bauer said that the service industry has not yet fully recovered from the epidemic. On the other hand, there are inflationary pressures, and measuring these two pressures at the same time can be said to be a major challenge.
