US Federal Reserve President Jerome Powell said on Tuesday that inflation in the US economy is starting to slow down, although this is expected to be a long process, CNBC reports.

“The disinflationary process, the process of reducing inflation has begun and started in the commodity sector, which makes up about a quarter of our economy. But he has a long way to go. These are early stages,” the central bank chief said at an event in Washington, DC

Powell spoke with Carlyle Group co-founder David Rubenstein during a question-and-answer session at the Economic Club of Washington, D.C.

Powell is a former partner at that firm.

Markets returned to a positive trend when Powell spoke as investors hope the Fed will soon end the aggressive rate hikes it began last year.

At the Fed’s latest meeting, which ended six days ago, the Fed raised its benchmark interest rate by a quarter of a percentage point, the eighth increase since March 2022, to a target range of 4.5%-4.75%.

In his comments on Tuesday, Powell gave no indication of when interest rate hikes would stop and said it would likely take until 2024 before inflation reaches a point the Fed is comfortable with.

The central bank is targeting 2% inflation, and it is currently well above that level on several measures.

“We expect 2023 to be a year of significant slowdown in inflation. In fact, it’s our job to make sure that’s the case. I suspect that, certainly, not only this year, but also in the next one, a reduction of almost 2% will be required,” he said.

Powell first mentioned the “disinflationary” trend at a news conference after the meeting last Wednesday.

(source: news.ro)