Fed Vice Chairman: Inflation Remains High Despite Moderation

Fed Vice Chairman Brainard made assessments of monetary policy in his speech at Chicago’s Booth School of Business.

Stating that the drop in inflation in recent months is important for American households, businesses and consumers, Brainard said: “It takes time and determination to bring high inflation down to 2 percent again. We are committed to this.” he said.

Brainard recalled that the Fed and other foreign central banks tightened their monetary policies last year.

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Saying that industrial production data announced yesterday points to a weakening in the manufacturing sector, Brainard said expectations that US growth will be below potential in 2022 and 2023 also reflect significant policy tightening. monetary.

Contrasting with the slowdown in output growth, Brainard said, the labor market remains tight through 2022, with layoffs below pre-COVID-19 outbreak levels.

Recalling that inflation has receded from the high levels of recent months, Brainard noted that this slowdown reflects war-related energy shocks and declining commodity inflation.

Noting that despite these developments, uncertainty remains to a large extent, Brainard said that other impacts related to war and epidemic can also be seen.

Emphasizing that the Fed is determined to restore price stability, Brainard said: “Despite the recent moderation, inflation remains high and monetary policy will need to be ‘tight enough’ for a while to ensure inflation returns. to 2 percent sustainably. He” used the phrases. (AA)