new York US Federal Reserve Chairman Jerome Powell has sent an unusually strong message to the markets. In his speech at the important central bank meeting in Jackson Hole, Wyoming, he emphasized that he would stick to the tough course to fight inflation. Price stability “is the rock of our economy,” he stressed. “Without stable prices, the economy doesn’t work for anyone.”
Therefore, the Fed must continue to raise interest rates to combat high inflation. Powell was also unusually clear about the harsh consequences that this course entails. This will result in a longer period of weaker growth, “as well as a weaker labor market. This will be painful for households and businesses,” Powell clarified. “Unfortunately, that’s the cost of fighting inflation.”
More in a moment
More: Jackson Hole: What matters at the most important central banker conference of the year
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