'Giant Step' Within Two Days, US Powell: "Focused on Lowering Inflation to 2%"

[Image source=AP Yonhap News]

[Asia Economy New York=Special Correspondent Joselgina]Jerome Powell, Chairman of the U.S. Federal Reserve (Fed), said on the 17th (local time), "My colleagues and I are very focused on bringing inflation back to our 2% target."

According to the economic media CNBC, Chairman Powell made this statement during his opening remarks at the 'Conference on the International Role of the U.S. Dollar' hosted by the Fed in Washington DC on the same day.

Chairman Powell emphasized that "the Fed's strong commitment to price stability will contribute to broad confidence in the dollar as a store of value" and stressed the focus on controlling inflation.

This remark drew attention as it came just two days after the Fed implemented a 0.75 percentage point interest rate hike at the June Federal Open Market Committee (FOMC) regular meeting, the first such increase in 28 years.

The Fed took this giant step after the recently released May U.S. Consumer Price Index (CPI) surged 8.6%, marking the largest increase since December 1981, and inflation expectations also rose sharply.

Chairman Powell has indicated that the July FOMC may also raise interest rates by 0.5 or 0.75 percentage points.

He said, "Our dual mandate (price stability and employment) depends on maintaining financial stability," adding, "The Fed's commitment to these two mandates and financial stability will encourage the international community to hold and use the dollar."

Furthermore, referring to future changes in the global financial system such as the 'digital dollar,' he predicted, "Rapid changes that could affect the international role of the dollar will occur in the global monetary system in the future."

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