Fed Chair Jerome Powell will discuss the report and Fed
policy in back-to-back congressional hearings next week,
appearing at 10 a.m. EST Tuesday before the Senate Banking
Committee and Wednesday at 10 a.m. before the House Financial
Services Committee.
It will be Powell's first testimony since the Republican
party took control of the House after the November midterm
elections.
(Reporting by Howard Schneider; Editing by Andrea Ricci)
By Howard Schneider
WASHINGTON, March 3 (Reuters) - The U.S. Federal Reserve is
"acutely aware" of the challenges high inflation poses to the
economy and is "strongly committed" to its 2% target for price
increases, the central bank said on Friday in its latest
semiannual report to Congress on monetary policy and the
economy.
The document, largely a backward-looking summary of recent
economic developments and Fed policy meetings, noted what have
become the dominant themes for Fed debate - a labor market where
workers remain in short supply, economic growth that likely
needs to slow further to temper price hikes, and inflation that
remains "well above the Federal Open Market Committee's
objective."
"In response...the FOMC continued to rapidly increase
interest rates and reduce its securities holdings," the report
said, and also "anticipates that ongoing increases in the target
range will be appropriate."
The document noted that U.S. financial conditions have
tightened since the Fed's last report to Congress in June, and
hinted that the impact of monetary policy was intensifying in
some corners of the economy.
Business loans by banks grew through 2022 "but decelerated
in the fourth quarter," the report said. "Some indicators of
future business defaults are somewhat elevated."
Household loan delinquency rates were rising, and mortgage
issuance "continued to decline materially."
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