Fed Chair Powell Reiterates 2% Inflation Target, Defends Central Bank Independence in House Testimony

According to Fed Chair Powell's recent House testimony, the Federal Reserve reiterated its commitment to the 2% inflation target, stating today's CPI report does not mean "the mission is complete." The Fed maintains a zero-tolerance stance on high inflation and plans to review its inflation framework.

Powell also emphasized the Fed's independence, pledging to act "diligently" if challenged by external pressure, with a goal to prevent political interference. Regarding the balance sheet, he noted the Fed will provide ample advance notice before adjusting policy and may soon begin considering when to resume Treasury purchases.