Chiefs of the Federal Reserve as well as the European Central Bank on Friday dashed any hopes that the two central banks would change their inflation targets. Federal Reserve Chair Jerome Powell confirmed that no changes would be made during his keynote address at the annual Federal Reserve Bank of Kansas City economic symposium at Jackson Hole, Wyoming on Friday.
“Two percent is and will remain our inflation target,” Powell confirmed. “We are committed to achieving and sustaining a stance of monetary policy that is sufficiently restrictive to bring inflation down to that level over time.” As the United States made its way out of the pandemic, the country’s economic strain persisted amid global supply chain shortages and labor market shortages.
European Central Bank President Christine Lagarde is adamant that the ECB will not adjust its target either. “We are playing a game; there are rules; don’t change the rules of the game halfway through,” she explained, before adding that she does believe that the fight against inflation is more than halfway complete.