jerome h powell : semiannual monetary policy report to the congress testimony by mr jerome h powell, chair of the board of governors of the federal reserve system, before the committee on financial services, us house of representatives, washington dc, 21 june 2023. * * * chairman mchenry, ranking member waters, and other members of the committee, i appreciate the opportunity to present the federal reserve's semiannual monetary policy report. we at the fed remain squarely focused on our dual mandate to promote maximum employment and stable prices for the american people. my colleagues and i understand the hardship that high inflation is causing, and we remain strongly committed to bringing inflation back down to our 2 percent goal. price stability is the responsibility of the federal reserve, and without it, the economy does not work for anyone. in particular, without price stability, we will not achieve a sustained period of strong labor market conditions that benefit all. i will review the current economic situation before turning to monetary policy. current economic situation and outlook the u. s. economy slowed significantly last year, and recent indicators suggest that economic activity has continued to expand at a modest pace. although growth in consumer spending has picked up this year, activity in the housing sector remains weak, largely reflecting higher mortgage rates. higher interest rates and slower output growth also appear to be weighing on business fixed investment. the labor market remains very tight. over the first five months of the year, job gains averaged a robust 314, 000 jobs per month. the unemployment rate moved up but remained low in may, at 3. 7 percent. there are some signs that supply and demand in the labor market are coming into better balance. the labor force participation rate has moved up in recent months, particularly for individuals aged 25 to 54. nominal wage growth has shown some signs of easing, and job vacancies have declined so far this year. while the jobs - to - workers gap has narrowed, labor demand still substantially exceeds the supply of available workers. 1 inflation remains well above our longer - run goal of 2 percent. over the 12 months ending in april, total personal consumption expenditures ( pce ) prices rose 4. 4 percent ; excluding the volatile food and energy categories, core pce prices rose 4. 7 percent. in may, the 12 - month change in the consumer price index ( cpi ) came in at 4. 0 percent, and the change in the core cpi was 5. 3 percent. inflation has moderated somewhat since the

yves mersch : interview in wall street journal interview with mr yves mersch, member of the executive board of the european central bank, in wall street journal, conducted by mr brian blackstone and mr tom fairless and published on 1 february 2016. * * * over the last few months we ’ ve seen oil and commodity prices bringing down inflation. how worried should the ecb be about this, or is it providing the economy with a stimulus? the whole issue is how you see it on the time axis : is it a temporary, exogenous phenomenon where you can look through it, or are you to be worried that over a longer period you have second - round effects and a dis - anchoring of inflationary expectations. there are obviously some positive effects from low oil prices. it gives many companies additional leeway to invest or repair their balance sheets. all in all this is also a signal which is pointing to future resilience of the moderate pace of recovery. how much should the ecb respond to deviations from its target of just below 2 %, when it ’ s being driven by oil? is there a danger the ecb is reacting too mechanically to deviations from its target? let me first put things straight : i do not consider that we have an inflation target. we have a quantitative definition of price stability over the medium term and we assess the risks to price stability according to our two pillars, the real economy and the monetary pillar. we see that both pillars show a lot of positive developments. there is resilience in output, and there is reduction of slack in the economy and the labor market. but overall there is still slack in the system. then we see this is happening in an environment of abnormally low inflation. we will probably move into negative territory from spring until early summer if we mechanically adjust our projections. this brings us into a zone of discomfort. we have not precisely defined what we understand as medium term, but it is not necessarily equal to our projection horizon. for example some of our measures that we have decided in december will last until 2019. the reinvestment and the liquidity effect of the recalibration in december will exceed three years. we will be seen in the category of flexible inflation targeters but not inflation targeters where we have a point landing promised on day x. does this indicate a hesitance about doing more in march? no, each time we meet, we assess the economic situation. and each