US inflation must drop to 2%, says Jerome Powell

The Fed is “firmly committed to getting inflation back to 2% and will continue to do so until the job is done,” said Powell, after the entity’s monetary policy committee meeting, which raised interest rates in another three quarter percentage point.

He also warned of the risks of “premature easing” of monetary policy.

Powell added that the US housing market will have to go through a “correction” to better balance supply and demand and for home price increases to return to a more normal pace.

“This difficult correction” should put the housing market in better balance, Powell told a news conference after the Fed’s decision to raise its policy rate by another 75 basis points.

The official added that inflation in the housing sector is likely to remain quite high for some time.

With information from AFP and Reuters