Fed's Barr says current monetary policy should remain

The head of the Federal Reserve (Fed, the central bank of the United States) Michael Barr said this Wednesday (3) that the institution's current monetary policy is in a good position and is likely to remain that way for "quite a long time".

"We need to have more certainty about shocks to make a decision," Barr said about interest rates, in a conversation at the Community Development Bankers Association. "The duration of the conflict and data will define the direction of monetary policy," he added.

The Fed leader emphasized that it is necessary to monitor whether prices will go in the "wrong direction".

According to him, it is necessary to work on the shocks from tariffs and the war in the Middle East to bring inflation back to the 2% target.

Barr commented that US growth has been resilient and the unemployment rate is low, but that the Fed's loosening of supervisory rules could create problems in the future and stress the sector.

In his view, the current rules are benefiting big banks, but not community banks.

Asked about artificial intelligence (AI), he said that AI could cause a shock to the job market in the short term and that the use of technology has increased the Fed's productivity.

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Source: CNN