Powell noted that the economy has been growing faster than expected and that consumers have kept spending briskly — trends that could keep inflation pressures high. He also reiterated the U.S. Fed's determination to keep its key rate elevated until price increases are reduced to the central bank's two per cent target.
His speech — at an annual conference of central bankers — highlighted the uncertainties surrounding the economy and the complexity of the Fed's response to it. That marked a sharp contrast to his remarks from Jackson Hole a year ago, when he bluntly warned Wall Street that the central bank was going to continue its campaign of sharp rate hikes to rein in spiking prices.
As a result, at future meetings the Fed “will proceed carefully as we decide whether to tighten further or, instead, to hold the policy rate constant and await further data,” Powell said.