- The Federal Reserve held off on a rate hike at its September meeting.
- Since March 2022, the central bank has raised its benchmark borrowing rate 11 times.
- Consumers have been feeling the impact as yields on savings and loans run higher.
Powell says the worst thing the Fed can do is not restore price stability
Fed Chair Jerome Powell said restoring price stability is the top priority of the central bank and failing to do that has serious consequences for the economy.
“The worst thing we can do is to fail to restore price stability, because the record is clear on that,” Powell said. “If you don’t restore price stability, inflation comes back and … you can have a long period where the economy is just very uncertain, and it’ll affect growth. It … can be a miserable period to have inflation come constantly coming back and the Fed coming in and having to tighten again and again.”
— Yun Li
A soft landing is possible but not a baseline scenario, Powell says
Fed chair Jerome Powell threw cold water on the notion that a soft landing is a baseline scenario while taking questions from reporters on Wednesday.
When asked if a soft landing was a “baseline expectation,” Powell immediately responded no before explaining that a the scenario was indeed possible.
“No, no, I would not do that. I’ve always thought that the soft landing was a plausible outcome, that there was a path to a soft landing,” he said. “It’s also possible that the path has narrowed and widened.”
“Ultimately this may be decided by factors outside of our control at the end of the day, but I do think it’s possible,” Powell said. “I also think this is why we are in a position to move carefully, again. We will restore price stability, and we know we have to do that and we know that the public depends on us doing that.”
— Brian Evans
