Federal Reserve Chair Jerome Powell recently warned that maintaining high interest rates for an extended period could jeopardize economic growth. Speaking at a recent economic forum, Powell emphasized the delicate balance the Fed must maintain to manage inflation without stifling economic activity
Source:- news 18
While acknowledging the necessity of high rates to combat inflation, Powell highlighted the risks of prolonged monetary tightening. He noted that excessively high rates could lead to reduced consumer spending, lower business investment, and ultimately slower economic growth. The Fed’s current approach aims to navigate these challenges by closely monitoring economic indicators and being prepared to adjust policies as needed.
Source:- BBC news
Powell’s remarks come amid ongoing debates about the appropriate duration and level of interest rates in the face of persistent inflationary pressures. The Fed has already implemented several rate hikes in recent months, drawing mixed reactions from economists and market participants. Some argue that continued rate increases are necessary to curb inflation, while others caution against potential negative impacts on the broader economy.
Powell reiterated the Fed’s commitment to its dual mandate of promoting maximum employment and stable prices. He assured that any future decisions on interest rates would be made with careful consideration of their potential effects on economic growth and stability.
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