Brainard: Policy must be 'sufficiently restrictive' for some time - Breaking The News

Brainard: Policy must be 'sufficiently restrictive' for some time

19 January

1 min read

EPA/JIM LO SCALZO

Federal Reserve Vice Chair Lael Brainard said on Thursday, in a speech at the University of Chicago Booth School of Business, that the monetary policy has to be "sufficiently restrictive for some time" in order for inflation to fall back to 2%, as even with the recent moderation the figure remains high.

She asserted that the slowdown in the interest rate hike pace enables Fed to "assess more data as we move the policy rate closer to a sufficiently restrictive level, taking into account the risks around our dual-mandate goals."

Brainard noted that the war in Ukraine and the pandemic could cause further shocks as "substantial uncertainty remains." Commenting on the wages, she said that they "do not appear to be driving inflation into a 1970s style wage-price spiral."

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