FED Chairman Powell: The FED is committed to learning from bank failures. The March banking turmoil could lead to tighter credit conditions, the extent of which is uncertain, and the resilience of the financial system cannot be complacent.
Most FOMC members expect two or more rate hikes before the end of the year. 2% inflation is still a long way off.
The strain on the US banking system has eased and deposit flows have stabilized. The full effects of monetary tightening, especially on inflation, will take time to emerge.
The U.S. core personal consumption expenditures (PCE) price index may have risen by 4.7% in May from a year earlier; the overall PCE index is estimated to have risen by 3.9%. Some indicators of the real estate market have picked up; real estate activity remains well below peak levels.
I look forward to evaluating proposals for regulatory and supervisory changes to banks of SVB’s size and, where appropriate, implementing them.
Overall, the U.S. banking sector is strong and resilient.
Powell: The FED is committed to learning from bank failures
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