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MNI BRIEF: Powell Says US Is 'Far' From Fiscal Dominance

USCentral Bank NewsPolicy NewsFederal ReserveEM Policy NewsEM BriefBriefStoryNorth America

MNI (WASHINGTON) - The United States is far from the point where the Federal Reserve would ever have to re-think its ability to raise interest rates due to an overwhelming budget, Chair Jerome Powell said Wednesday, noting fiscal policy remains on an unsustainable path. 

"If the central bank can't raise rates to deal with inflation because the fiscal situation is so bad that they can't raise rates, that's called fiscal dominance, and we're so far from that," Powell said at a New York Times DealBook Summit. "We'll always use our tools to achieve price stability and maximum employment 2% inflation. We're not thinking about, 'Oh, we better not raise rates because of the budget.' If we ever get to that point -- we're far from that point." 

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MNI (WASHINGTON) - The United States is far from the point where the Federal Reserve would ever have to re-think its ability to raise interest rates due to an overwhelming budget, Chair Jerome Powell said Wednesday, noting fiscal policy remains on an unsustainable path. 

"If the central bank can't raise rates to deal with inflation because the fiscal situation is so bad that they can't raise rates, that's called fiscal dominance, and we're so far from that," Powell said at a New York Times DealBook Summit. "We'll always use our tools to achieve price stability and maximum employment 2% inflation. We're not thinking about, 'Oh, we better not raise rates because of the budget.' If we ever get to that point -- we're far from that point."