[서울신문] Powell “Do not raise interest rates until the inflation and employment targets are met”

Jerome Powell, chairman of the Federal Reserve Board of the United States, said on the 24th (local time) that inflation could take three years or more to reach its target, and that it would freeze interest rates for a long time. It reaffirmed the will to maintain the existing zero-level interest rate (0.00~0.25%) monetary policy.

According to Reuters and others, Chairman Powell appeared at a hearing on the House Financial Services Commission on the same day and stressed that he will not raise interest rates until the Fed’s targets for inflation and employment are met. He predicted that it could take “3 years or more” to achieve the 2% inflation target.

Powell said he would not reduce the size of the QE policy, which puts $120 billion a month on bond purchases, until the Fed’s targets for inflation and employment make real progress. It is done” he pointed out. “We will release the Fed’s assessment of inflation every quarter in the future.” Inflation may accelerate in the future, but this is a temporary phenomenon and is not a sign of an inflation threat.

He admitted, however, some inflation potential. Chairman Powell cited the case of a rise in automobile prices due to a shortage of semiconductors, and said, “It is true that some asset prices are rising.” . “Our policy is mitigating because the unemployment rate is high and the job market is far from full employment,” he added. “There is a long way to go for maximum employment.”

At the Senate Financial Committee hearing the day before, Chairman Powell said that the US economic recovery was incomplete and said that he would maintain ultra-low interest rates for the time being.

The New York stock market laughed wide at the words of Chairman Powell, who dismissed inflation concerns that day. The major index, which had weakened as the 10-year Treasury bond rate soared to 1.4%, the highest level since February of last year, turned to an upward trend at the beginning of the opening. The Dow Jones 30 Industrial Average ended the trade at 3,1961.86, up 424.51 points (1.35%) from the previous day, breaking an all-time high based on intraday and closing prices. The Standard & Poor’s (S&P) 500 index rose 44.06 points (1.14%) to 3925.43, and the NASDAQ index also rose 132.77 points (0.99%) to 13,597.97, respectively.

Senior Reporter Kyu-Hwan Kim [email protected]