Powell at Jackson Hole: Fed committed to 2% inflation but agility required

NEW YORK (August 25) Fed Chair Jerome Powell reiterated the FOMC's commitment to bring inflation down to 2% during his speech in Jackson Hole, WY today. He stated that "two percent is and will remain our inflation target." In order to bring inflation back to target, Powell said that a period of below-trend economic growth will be required. Consequently, the stance of monetary policy will need to remain restrictive for the foreseeable future. The Fed Chair also indicated that the FOMC "is prepared to raise rates further if appropriate." But the FOMC is facing a number of uncertainties at this juncture. Consequently, Fed policymakers will need to be "agile." In other words, the FOMC is in data dependency mode for the foreseeable future.

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