Federal Reserve Chairman Jerome Powell said the central bank will likely keep raising interest rates for the foreseeable future to combat stubbornly high inflation.
While inflation has fallen significantly over the past few months, it is still more than double the Fed’s 2% target annual rate.
“I think it’s too early to declare victory or to think we’ve really achieved victory,” Powell said at a news conference. “The job is not quite done yet.”
Powell noted that the Fed continues to err on the side of being cautious about inflation. This means that the central bank would rather do too much damage to the economy to bring down inflation than stop raising rates too early and cause inflation to rise again.
“I still think it’s very difficult to manage the risk of doing too little and finding out six or 12 months later that we’re actually close but not getting the job done,” Powell said. “We have no incentive or desire to overtighten, but If we feel we’ve gone too far … we have tools that can address that.”