Federal Reserve Chairman Jerome Powell explains the decision to leave the policy rate, federal funds rate, unchanged at the range of 5.25-5.5% and responds to questions in the post-meeting press conference.
Key quotes I do think policy is restrictive and is weighing on demand. You can see that with the labor market. Saw evidence of that today in the JOLTS report. Quits and hiring rates have normalized. We believe over time policy is sufficiently restrictive to bring inflation back down to 2%. The data will show if that's so. Unlikely that next policy rate move would be a hike. Policy focus is on how long to keep policy restrictive.
Central banks normally have a mandate to ensure price stability, which in most cases means targeting a core inflation rate of around 2%. If inflation falls below target the central bank may cut base lending rates, with a view to stimulating lending and boosting the economy. If inflation rises substantially above 2% it normally results in the central bank raising base lending rates in an attempt to lower inflation.
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