The Federal Reserve’s top officials have signalled that high hurdles remain for any monetary policy tightening, as chair Jay Powell and his inner circle seek to steady the central bank’s message after almost a week of market gyrations.
In a series of interventions, senior Fed officials this week countered fears among some investors, and even lawmakers, that they were gearing up to raise interest rates more rapidly than expected in light of the fast-improving economic outlook.
Instead, they stressed their belief that the current US inflation surge is temporary, their commitment to doggedly pursue full employment, and their caution in withdrawing support for the recovery.
“We will not raise interest rates pre-emptively because we think employment is too high [or] because we fear the possible onset of inflation,” Powell said during a congressional hearing on Tuesday. “Instead, we will wait for actual evidence of actual…