The Federal Reserve (Fed) will continue to maintain a cautious policy in adjusting interest rates.

The Fed Chairman emphasizes that the current policy is restrictive but not overly tight, and does not foresee a significant impact of tariffs on prices in the near future.

MAIN CONTENT

  • The Fed Chairman supports a patient approach to adjusting interest rates.

  • The current policy is somewhat restrictive but not overly severe.

  • The impact of tariffs on short-term prices is perceived to be negligible.

What is the Fed Chairman's view on the current interest rate adjustments?

Fed Chairman Schmidt affirms the necessity of a patient approach when changing policy interest rates, to ensure stability and avoid putting unnecessary pressure on the economy.

He assesses that the current interest rate is somewhat restrictive to control inflation, but has not exceeded levels that would harm growth. This view is based on analyses of the recent economic and inflation situation.

How restrictive is the current monetary policy?

According to Fed Chairman Schmidt, the current policy is moderately restrictive, enough to help control price pressures without overburdening the production and business sectors.

This assessment is based on macroeconomic data, showing that the Fed is balancing between restraining inflation and maintaining financial market stability, avoiding major shocks in liquidity or borrowing costs.

What will be the impact of tariffs on prices in the coming months?

Mr. Schmidt does not see a pronounced impact from tariff measures on consumer prices in the short term.

This may be because tariff measures primarily have indirect effects and are offset by other economic factors in the supply chain, causing the overall impact on prices to not be sudden.

Interest rate adjustments need to occur cautiously and gradually, in order to maintain long-term economic stability.
Fed Chairman Schmidt, speaking on August 12, 2023

Frequently Asked Questions

What is the 'patient' policy in interest rate adjustments?

It is a cautious approach, carefully considering economic data before making changes, to avoid shocking the economy.

How does the Fed's restrictive policy affect inflation?

A moderate level of restriction will help reduce price pressure without negatively impacting economic growth.

Why is the impact of tariffs on prices not significant?

Tariffs have an indirect effect and are offset by other factors in the supply chain, so they do not cause significant volatility in the short term.

Can the Fed change its policy abruptly?

The Fed prioritizes stability, so it often adjusts policies gradually and based on actual data.

Source: https://tintucbitcoin.com/fed-khong-du-thue-tac-dong-tien-so/

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