Federal Reserve Chairman Jerome Powell discussed a number of topics this week, such as inflation and the central bank’s digital currencies (CBDC) following days of meetings by the Federal Open Market Committee (FOMC). The CEO of the central bank was asked about hectic stocks such as Gamestop shares and dogecoin crypto assets. Powell said the Federal Reserve aims to ensure financial stability, but noted that there are some things in the capital markets that are a little sparkling.
Chairman of the Federal Reserve for Inflation: Commission seeks inflation moderately above 2%
FOMC meetings this week revealed that the US Federal Reserve plans to continue its policy of easing cash flows until it is convinced that the economic effects of the pandemic are being considered. The FOMC meetings were followed by press conferences, at which Fed Chairman Jerome Powell answered questions from a number of different news agencies. Powell discussed the reference interest rate and inflation, while he was also asked about digital currencies and things like Gamestop stocks and the recent dogecoin rallying (DOGE).
At first, Powell was overwhelmed with questions about inflation, and one reporter stressed that some people believed that “the Fed could let things get out of hand with the new political position.” The reporter asked the chairman of the Federal Reserve if the central bank would be able to outpace inflation before significantly outpacing the 2% target. Powell noted that because the Federal Reserve has managed to keep inflation below 2% for “some time,” he stressed that “the commission has been looking for inflation moderately above 2% for some time.”
[The Fed is] strongly committed to achieving our goals of maximum employment and price stability.
Although China’s leading country is creating a digital currency for the central bank, Powell says “the USD is still the ‘reserve currency in the world.’
The Fed chairman was also asked why the United States is lagging behind countries like China in the race to create a central bank’s digital currency (CBDC). “We feel obligated to understand technology and all policy issues very, very well,” Powell said in response to questions from the CBDC.
“Central bank digital currencies are now possible and we will see some of them around the world,” Powell added. “And we need to find out if this is something that would be good for the people we serve. How would it work in our system? And there are some very, very difficult questions to answer, and we are engaged in a serious program to understand both technological and political issues. “
The chairman of the Federal Reserve explained that the dollar was still very powerful in his eyes and stressed that the US dollar was the “world reserve currency.”
“This means that the dollar is used in transactions around the world, much more than any other currency. And that’s because of our rule of law, our democratic institutions, which are the best in the world, our economy, our hard-working people, all the things that the United States does, “Powell said.
Gamestop promotions and Dogecoin
One reporter noted the noise that has bypassed some markets such as dogecoin (DOGE) and Gamestop stocks. The journalist said that people were looking for “profitability in this market” and wondered if the Fed felt responsible for the current financial stability in America. “Is there a concern for financial stability from the Fed’s point of view at the moment?” The Fed chairman’s reporter asked. Powell responded by saying that the financial stability that the Fed provides is quite broad and the central bank does not jump on one issue and then move on to the next.
“Financial stability for us is real, we have a broad framework. So we’re not just jumping from one thing to another, Powell said. “I know a lot of people just look at asset prices and they look at some of the things that are happening in the stock markets, which I think reflects the foam in the stock markets. But in fact, we are trying to stick to a framework for financial stability so that we can talk about it in the same way every time and so that we can be responsible for it, “he added.
Just as Powell defended mega banks by hinting at the so-called “power” of financial operators in the past, he has positioned Wall Street banks again as strong financiers this week.
“Using the financial system is not a problem. We have very well-capitalized big banks, “Powell said at a news conference.
What do you think of Jerome Powell’s comment on inflation, CBDC and capital markets, which are sparkling? Tell us what you think about this in the comments section below.
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