Testimony by Chair Powell on the semiannual Monetary Policy

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3/7/2023

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The testimony covers the economic outlook, monetary policy, and financial stability issues amid the ongoing COVID-19 pandemic.

The economy has made significant progress toward recovery, but still faces considerable risks and challenges, especially from new variants of the virus and supply chain disruptions.

The Federal Reserve has maintained an accommodative stance of monetary policy to support the economy and achieve its dual mandate of maximum employment and price stability.

The Federal Reserve has also taken various actions to ensure the smooth functioning of financial markets and provide liquidity and credit to households and businesses.

The Federal Reserve is closely monitoring inflation developments and expectations, which have risen sharply due to transitory factors such as supply bottlenecks, higher energy prices, and base effects.

The Federal Reserve expects inflation to moderate as these factors wane over time, but is prepared to adjust its policy stance if needed to keep inflation expectations well anchored at 2 percent over the longer run.

The Federal Reserve is also gradually reducing its asset purchases as part of its policy normalization process, consistent with its forward guidance and communication with the public.

The Federal Reserve will continue to assess the appropriate pace of asset purchases in light of incoming data and evolving conditions.

The Federal Reserve remains committed to using its full range of tools to support the economy and promote a strong, stable, and inclusive recovery for all Americans.

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