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Federal Reserve Board Chairman Jerome Powell raised questions after the Federal Reserve raised its target interest rate by three-quarters of a percent to halt a disruptive surge in inflation, during a news conference after a two-day meeting of the Federal Open Market Committee. (FOMC) in Washington, June 15, 2022.

Elizabeth Frantz | Reuters

Federal Reserve officials began strong language Friday to describe their outlook on inflation, promising a full-fledged effort to restore price stability.

In its semiannual report on monetary policy – a precursor to President Jerome Powell’s appearance before Congress next week – the central bank promised that it would take a full-fledged effort to ease inflationary pressures at their fastest pace in more than 40 years. Will try.

“The committee’s commitment to restoring price stability — which is essential to maintaining a strong labor market — is unconditional,” the Fed said in a report to Congress.

It marks the Fed’s strongest statement yet, reaffirming its commitment to continue raising interest rates and tightening policy to address an otherwise paramount issue of the economy.

The statement did not elaborate on the meaning of “unconditional”.

Earlier this week, the Fed raised its benchmark interest rate by three quarters of a percent in another attempt to slow demand. Market participants worry that the Fed’s tightening could lead to a recession, although Powell said he still thinks it can be avoided.

The rate hike came after a move in May to raise rates by half a point. This week’s move was the most aggressive since 1994.

With the rate hike, the Fed is reducing assets from its $9 trillion balance sheet, allowing it to roll off some of the proceeds from bonds.

Earlier in the day, Powell himself took a similar pledge, saying that he and the rest of the Fed were “fully focused” on reducing inflation.

Correction: Comments from Fed officials were in the central bank’s semiannual report on monetary policy. An earlier version got the timing wrong.

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