Federal Reserve Chairman Jerome Powell said Wednesday the process of weakening inflation is still happening slowly but it is unclear what impact the latest round of banking sector trouble will have on the economy and monetary policy.
The process of disinflation is ongoing but price pressures remain resilient in the non-housing service sector, Powell said at his press conference after the Federal Open Market Committee meeting.
When it comes to the impact of tighter financial conditions on lowering inflation, “we think it’s potentially quite real” but also uncertain, and the Fed will have to watch this for how it influences monetary policy.
Powell said that he expects and welcomes outside investigations into the banking woes that kicked off with the collapse of Silicon Valley Bank.
“It’s 100% certain there will be independent investigations” into what happened with the banks and the Fed welcomes those inquiries, as it proceeds on its own investigation, Powell said.
© 2023 Thomson/Reuters. All rights reserved.
