Investing.com – Federal Reserve Chairman Jerome Powell said Wednesday, a “patiently accommodative monetary policy stance” is important to boost the labor market and the overall economy following a stall in recent months.
“Also important is a patiently accommodative monetary policy stance that embraces the lessons of the past—about the labor market in particular and the economy more generally,” Powell said Wednesday to the Economic Club of New York on the “State of the U.S. Labor Market.”
The U.S. central bank chief, citing the Fed’s Statement on Longer-Run Goals and Monetary Policy Strategy, reiterated that a strong labor market would not solely be a trigger to tighten monetary policy as full employment, part of the Fed’s dual mandate, was unlikely to cause an unwanted increase in inflation.
“Recognizing the economy’s ability to sustain a robust job market without causing an unwanted increase in inflation, the statement says that our policy decisions will be informed by our ‘assessments of the shortfalls of employment from its maximum level’ rather than by ‘deviations from its maximum level,’ Powell said . “This means that we will not tighten monetary policy solely in response to a strong labor market.”
Source: Economy - investing.com
