Fed promises ‘unconditional’ approach to taking down inflation in report to Congress

U.S. Federal Reserve Board Chairman Jerome Powell takes questions after the Federal Reserve raised its target interest rate by three-quarters of a percentage point to stem a disruptive surge in inflation, during a news conference following a two-day meeting of the Federal Open Market Committee (FOMC) in Washington, June 15, 2022.

Federal Reserve officials said Friday that they would work to restore price stability.

In its annual report on monetary policy, the central bank promised to launch a full effort to bring down inflation pressures, which are at their fastest pace in more than 40 years.

According to a report to Congress, the Committee's commitment to restoring price stability is not negotiable.

The Fed made its strongest statement yet, affirming its commitment to raise interest rates and tighten policy to solve the economy's paramount issue.

The statement didn't say what "unconditional" meant.

The Fed raised its benchmark interest rate this week in order to slow demand. Powell thinks that a recession can be avoided despite the market participants' fears.

Rates were raised by half a point in May. The move this week was the most aggressive in a long time.

Along with rate hikes, the Fed is reducing assets from its $9 trillion balance sheet.

Powell said that he and the rest of the Fed are focused on bringing down inflation.