United States (US) inflation made waves this week as it hit its highest levels since 2008, coming in at 5.4% in June, much higher than the expected 4.9%. Markets quickly bet on tighter monetary policy by the US Federal Reserve (the Fed). However, testimony by Fed Chairman, Jerome Powell, quickly stemmed any speculation when he stated that the Fed’s benchmark standard of “substantial further progress” toward full employment and price stability is still quite far off, even as the country continues to make headway in the economic recovery. Powell, however, did note that the Fed is ready to intervene should inflation spiral out of control.
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