Fed focused on returning inflation to 2% target, chair says

By Ovunc Kutlu

ANKARA (AA) - US Federal Reserve is focused on returning inflation to its 2% objective from the current 40-year record high level, the central bank's Chair Jerome Powell said on Friday.

Powell stressed that the Fed is committed to its dual mandate, which is price stability and maximum employment, and added that financial stability encourages the international community to hold and use US dollars.

"For foreign economies, the wide use of the dollar allows borrowers to have access to a broad pool of lenders and investors, which reduces their funding and transaction costs," Powell said during his speech at the "International Roles of the U.S. Dollar" conference held in Washington, D.C.

The Fed chair, however, also noted that the global use of the US dollar can pose financial stability challenges that can have impact on households, businesses, and markets.

Powell's comments came after the Fed on Wednesday made its steepest rate hike in 28 years, raising its benchmark interest rate by 75 basis points after a 50 basis point of rate hike in May and a 25 basis point hike in March.

Annual consumer inflation in the US soared to 8.6% last month, its highest since December 1981.

Due to the Fed's aggressive monetary tightening, the US dollar index soared to 105.78 points this month -- the highest since December 2002.