Wosh reiterates commitment to the 2% inflation target, emphasizing monetary policy independence

Jinse Finance reported that on July 14, Federal Reserve Chair Wash stated at a Tuesday hearing that he would stick to his commitment not to provide forward-looking guidance on interest rates, with the entire testimony barely touching on interest-rate policy. Wash said the Federal Reserve is firmly committed to maintaining price stability and working to bring inflation back down to its 2% target, while also emphasizing that the Fed has the policy tools needed to achieve that goal. He said, “The more focused we are on our own responsibilities, the more we can stay away from politics.” Wash also said the Federal Reserve will reexamine its inflation framework to gain a deeper understanding of the factors driving inflation and what measures it can take to address it. When discussing the multiple newly established working groups at the Fed, Wash said these groups are currently still in the research and exploration stage. He noted that relevant discussions will first take place among 19 policymakers, and that the entire process will remain open and transparent, with research findings and policy ideas shared with the public on a regular basis. Regarding balance sheet policy, Wash emphasized that the balance sheet is part of monetary policy, not just a matter of how financial markets operate. Any adjustment to balance sheet policy will be communicated and explained in advance, and the market will be given sufficient time to prepare. When asked how he would respond if Trump attempted to interfere with Fed policy, Wash replied that he would continue to carry out his duties and adhere to independently setting monetary policy. He said the Fed has already demonstrated its commitment to policy independence and institutional reform.
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