“A significant policy adjustment is behind us: we have raised interest rates by 350 basis points since last July. However, inflation is still high and uncertainty about its further development has increased. This makes it important to have a forward strategy,” Lagarde said in her speech on Wednesday.
Powell is likely to be asked questions about how the latest turmoil will affect financial conditions and the economic outlook, and whether he sees room to lower inflation without triggering a recession. His job is to “clearly separate the problem of financial instability and the measures being taken to address it from the problem of inflation and strengthening the economy,” said Ellen Mead, an economics professor at Duke University and a former senior Fed official.
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