Home Business Next Fed Chair, Everyone Needs to Reconcile New Employment Goals and Rate Raises-Bloomberg

Next Fed Chair, Everyone Needs to Reconcile New Employment Goals and Rate Raises-Bloomberg

by news dir

Whether the Fed’s current chairman, Powell, or Fed’s director, Brainard, is heading the Federal Reserve Board (FRB) as of February next year, financial authorities have been in a pinch. There is a risk that it has been done.

The US Consumer Price Index (CPI) in October, which has risen sharply since 1990 compared to the same month of the previous year, and the household budget, which was the highest level in eight years.Expected inflation has also shaken confidence in financial officials who expected inflation to slow in the coming months.

Against this background, monetary policy is being signaled to accelerate the pace of tapering of bond purchases, and economic forecasts are updated to suggest a more aggressive rate hike cycle than previous forecasts. Authorities may be forced to make an early shift to tightening monetary policy in December.

Powell or Brainard are expected to be appointed as the next Fed chairs

However, the challenge for 2022 will be whether to lift the de facto zero interest rate policy and when to raise interest rates from near zero. Economists at Goldman Sachs Group and JPMorgan Chase have withdrawn their outlook for US interest rates to remain unchanged until 2011, and the market has already factored in the possibility that interest rate hikes will begin in July 2010.

Complicating monetary policy decisions and confronting communication challenges is the monetary policy review that the authorities launched in 20 years. Chair Powell and Director Brainard, along with other officials, agreed that it was “appropriate” to keep interest rates at ultra-low levels until maximum employment was achieved, and “widely subsumed maximum employment.” Goal “redefined.

At the time, monetary officials were criticized for not anticipating the ongoing rise in inflation, which is now in a difficult situation and lagging behind in controlling inflation.

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