United States Federal Reserve Chair Jerome Powell remarked on Friday during the Jackson Hole Economic Symposium that the central bank's efforts to reduce inflation could require softer labor markets, adding that further monetary policy tightening might be needed if those do not show signs of "cooling" soon.
Powell described the ongoing trends in inflation as a result of stronger demand and weaker supply, the situation that emerged with the COVID-19 pandemic and later coupled with Russia's military operation in Ukraine. He stressed that raising interest rates in such cases was necessary to "allow supply to catch up."
Commenting on inflation, Powell noted that the Fed will not raise its target from 2% while confessing there is still "a long way to go" to get there. He also underscored that the central bank will "proceed carefully" on whether it will raise the rates further or not.
