At the hearing in the House Financial Services Committee on monetary policy and the state of the economy, Federal Reserve Chairman Jerome Powell confirmed the need for gradual increase in interest rate.
“Further gradual increases in the federal funds rate will best promote attainment” of the Fed’s objectives, said Powell in his first semi-annual report since his appointment to chair the Fed at the beginning of February.
Besides, Powell has promised to retain a balance between the two divergent objectives, that is to avoid an overheated economy and allow inflation to rise to the target of 2%.
“Some of the headwinds the US economy faced in previous years have turned into tailwinds,” said Powell.
Moreover, according to Powell, despite the recent volatility in the financial markets, the country’s economic state remains strong.