The boss of the US Federal Reserve, Jerome Powell, talked about money stuff to other important people who take care of money from different places.
He said they might make it a bit more expensive to borrow money if that seems like a good idea because prices going up too fast. Prices before were going up faster but now not as fast. Still, they’re going up more than what the Federal Reserve wants. Jerome Powell talked about this in a place called Wyoming.
He also said they might keep the borrowing cost higher for a longer time, which might help with the money situation. In the US, prices went up a lot, like 3.2%, over the past year until July. The special interest rate for money is 5.25%, the highest in a really long time, and it went up 11 times since early 2022.
Mr. Powell talked about how prices for things we buy have gone down a bit, which is good. But, they are still too high. He mentioned that if needed, they might increase interest rates more. This is like making it a bit harder to borrow money. They’ll do this until they are sure prices are getting better.
He also talked about being careful with these changes. He said one reason prices are still high around the world is because of Russia invading Ukraine. This is causing problems. Even though the main price we pay for things went down a bit, the prices for food and energy can still change a lot.
Mr. Powell hinted that they might make borrowing money even harder soon. They are waiting for more information to decide. Someone from Columbia University named Cary Leahey said that because the economy is stronger than expected, they might need to make borrowing money harder to bring prices down. They want prices to go up by about 2% each year.
Mr. Powell talked about a lot more work that needs to be done before reaching the goal of 2%. He also said that the Fed plans to keep policies strict, which many experts were expecting.
Market experts think this just means the Fed will take their time and be careful. Michael Green, who works at Simplify Asset Management, said this.
Mr. Powell also talked about the housing market. Even though it slowed down before, it’s starting to get busier again. This might mean the Fed will make it a bit harder to borrow money.
He also said that before they can lower how much it costs to borrow money, they want more people to find jobs more easily. Right now, businesses are giving out higher pay to hire workers. This can make prices go up, so the Fed might need to keep borrowing money a bit expensive.
