Fed will seek to regulate inflation in the US

The president of the United States Federal Reserve Board (Fed), Jerome Powell, stressed that the US central bank is concentrating its efforts on returning the inflation rate to 2 % target and assured that the institution’s commitment to price stability contributes to reinforcing the role of the dollar in international markets.

In this regard, the US central banker indicated that the Fed’s strong commitment to price stability contributes to widespread confidence in the dollar as a store of value and encourages the international community to hold and use dollars.

“To that end, my colleagues and I are extremely focused on getting inflation back to our 2% target. Fulfilling our dual mandate also hinges on maintaining financial stability,” the Fed chief said.

In his welcoming remarks at a conference in Washington on the international role of the dollar, Powell said the dollar has multiple benefits, both for the US, reducing transaction fees and borrowing costs for households, businesses and the government, as well as for foreign economies, by allowing borrowers to access a wide pool of lenders and investors, thereby lowering their financing and transaction costs.

However, it also presents financial stability challenges that can materially affect households, businesses and markets, which is why the Fed “has played a key role in promoting financial stability” and supporting the use of dollars to an international level through its liquidity facilities.

K. Tovar

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Source: La Tercera