(Fed) Vice Chairman Lael Brainard stated that monetary policy will need to be restrictive for a while in order to reduce inflation to the 2 percent target, and that they are determined to avoid premature withdrawal in monetary policy tightening.
Lael Brainard, Vice Chairman of the US Federal Reserve (Fed) , made evaluations on monetary policy at the conference organized by the New York Fed. Lael Brainard stated that monetary policy will need to be restrictive for a while in order to reduce inflation to the 2 percent target, and stated that they are determined to avoid premature withdrawal in monetary policy tightening.
Noting that it will take time for the effects of tighter financial conditions to be seen across different sectors and to reduce inflation, Brainard said, ” Monetary policy will need to be restrictive for a while in order to have confidence that inflation has returned to the target .”
Brainard emphasized that they are determined to avoid premature pullback in monetary policy tightening.
Pointing out that the Fed is aware that the risks may become more prominently bilateral at some point, Brainard noted that the uncertainty is already high.
INFLATION IS VERY HIGH IN THE US AND ABROAD
” Inflation is very high in the US and abroad, and the risk of additional inflationary shocks cannot be ignored ,” Brainard said .
Noting that there is a risk of prolongation or aggravation of supply cuts due to Russia’s war in Ukraine, Kovid-19 quarantine measures in China or weather conditions, Brainard stated that the Fed is wary of financial vulnerabilities that may worsen with the emergence of other negative shocks.
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