A high-flying US economy which had witnessed its shortest recession on record earlier last year, would momentarily witness “a little higher” inflation this year as recovery appeared to be speeding up with supply disruptions stepping up prices in many sectors, however, the US Federal Reserve would limit any overshoot of its inflation target of 2 per cent, the US Fed Chair Jerome Powell said in a letter dated back to April 8 in response to a query from a Powell-critic, Senator Rick Scott, a press agency report published late on Tuesday had unveiled.
In point of fact, latest media headline that underscores plausible policy changes from the US Fed following a likely inflation-surge including a probable rate hike as fretted by many equity traders, came in as a response to a March 24 letter in which Senator Scott, a Florida Republican, had flagged sheer concerns about a sharp pickup in inflation alongside the US Central Bank’s bond repurchase program.
US Fed Chair Powell says will not tolerate an overshoot of inflation target
More importantly, in a reply to Senator Scott’s query on US Fed moves to address a likely inflation-surge, adding that the Fed would not tolerate an inflation rate exceeding 2 per cent for a prolonged period of time, Powell wrote in a five-page response, “We do not seek inflation that substantially exceeds 2 percent, nor do we seek inflation above 2 percent for a prolonged period.
I would emphasize, though, that we are fully committed to both legs of our dual mandate - maximum employment and stable prices”. Followed by the reveal of media report highlighting probable policy changes from the US Fed, Wall St.
slipped off amid investors’ frets of a higher interest rate, while US Dollar held forth after falling to a nearly seven-week low on previous session.